By Kuldip K. Ambastha
On Monday, June 13, 2022, MicroStrategy Incorporated (MSTR), an American technology company, had its stock price fall by -25.2% per share. MicroStrategy offers business intelligence, mobile software, and cloud-based services, and is often in the news because of its exposure to bitcoins which secure a $205 million, 3-year loan from a cryptocurrency bank. As the price of bitcoin and many other cryptocurrencies have fluctuated wildly in the recent past, MicroStrategy has also been affected as one of the companies with the biggest exposure to bitcoin. Investors are concerned for the health of MicroStrategy, since a margin call (demand for more bitcoins as collateral) could be initiated if the price of bitcoin drops significantly. MicroStrategy claims to have enough unrestricted bitcoins available to cover any margin call, but clearly Wall Street is skeptical on this front given the stock price decline seen on Monday, June 13, 2022.
Disclosure – The principals and clients of Ambastha Financial LLC have no positions in MSTR.
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