MicroStrategy Considers Potential Bitcoin Sale

MicroStrategy Considers Potential Bitcoin Sale—What You Need to Know

MicroStrategy's CEO Phong Le has publicly acknowledged that, under certain conditions, the company may sell its 649,870 Bitcoin holdings. This marks a departure from former Chairman Michael Saylor’s steadfast “never sell” stance. The company could face such a scenario if its stock falls below net asset value and funding options are exhausted, raising concerns about its financial strategy.

Key Takeaways

MicroStrategy's CEO, Phong Le, indicates that a Bitcoin sale is possible if stock conditions deteriorate.
This admission contrasts with the previous "never sell" ideology by former Chairman Michael Saylor.
The mNAV metric, which compares MicroStrategy's market value to its Bitcoin assets, is approaching concerning levels.
Analysts warn of potential liquidity issues due to substantial dividend obligations.
This shift could impact investor perception of MicroStrategy and its stance in the Bitcoin market.

Potential for a Bitcoin Sale

In a recent interview on What Bitcoin Did, MicroStrategy CEO Phong Le admitted for the first time that the company might sell its Bitcoin holdings if certain financial crises occur. This statement represents a significant change from former Chairman Michael Saylor’s unwavering belief that the company would “never sell Bitcoin.”

Le pointed out that the condition for a potential sale of Bitcoin, deemed the company's primary treasury asset, would arise if MicroStrategy's stock price falls below its net asset value and other funding options are no longer available. He explained, “We would sell portions of our Bitcoin as a last-resort move,” emphasizing that this decision would be financially justified.

MicroStrategy mNAV

Understanding mNAV and Its Risks

MicroStrategy uses a metric called mNAV to measure its market value against its Bitcoin holdings. When the mNAV ratio drops below 1, it indicates that the company's market cap is lower than the value of the Bitcoin it owns, a concerning signal for investors. Recent data shows that mNAV is precariously close to the 0.9x threshold, noted as a “danger zone” for the company.

If the mNAV dips below 0.9x, MicroStrategy may be forced to address its financial obligations, potentially leading to a sale of some Bitcoin to maintain shareholder value. This concern grows given the $750–$800 million in annual preferred share dividends the company must manage, which were incurred during its Bitcoin investment phase.

Strategy (MSTR) Stock Price Performance

Structural Shifts and Future Considerations

Analysts at Astryx Research have described MicroStrategy as having morphed into a "leveraged Bitcoin ETF combined with a software company." This structure allows for significant reward during Bitcoin price surges but can exacerbate financial strain during periods of liquidity crunch or heightened market volatility.

While MicroStrategy has stated it faces no risk of forced liquidation, Le’s recent acknowledgment of a potential trigger for voluntary Bitcoin sales marks a shift towards a more cautious approach. Investors are keenly watching how the mNAV metric trends and whether it stabilizes or falls further.

As the business landscape evolves, analysts are paying close attention to MicroStrategy's balance sheet strategy, particularly with the ongoing fluctuations in both Bitcoin and the company's stock, as projections head into 2026. The changing narrative on selling Bitcoin could influence the broader institutional perspective on holding cryptocurrencies.