MSTR, the leading Bitcoin concept stock, plunged as much as 12% intraday after first hinting it might "sell coins."

As the publicly listed company holding the most Bitcoin globally, MicroStrategy announced on Monday, December 1, that it has raised funds through stock sales and set up a $1.44 billion "US dollar reserve." This move is intended to address the sharp volatility in the cryptocurrency market and provide security for the payment of its dividends and debt interest. Previously, the price of Bitcoin had dropped from a high of over $126,000 in early October to about $85,000 in just over a month. Company executives stated that **if the indicator “mNAV,” which measures the relationship between enterprise value and cryptocurrency holdings, drops below 1, and if the company cannot raise funds in other ways, then Bitcoin will be sold to replenish the US dollar reserve.** This statement is viewed as a major turning point in company strategy, breaking the "always buy and hold" philosophy long advocated by its founder Michael Saylor. As the company for the first time hinted at the possibility of selling Bitcoin, its stock price plunged as much as 12.2% during Monday trading, finally closing down 3.3%. Investors’ sell-off reflected deep concerns about the sustainability of its business model during a “Bitcoin winter.” Dollar Reserve: Insurance Against a “Bitcoin Winter” Facing headwinds in the crypto market, MicroStrategy is taking steps to shore up its financial position. According to reports from the Financial Times and other media, the $1.44 billion reserve was funded by proceeds from stock sales. The company’s goal is to maintain a dollar reserve sufficient to pay "at least 12 months of dividends," and eventually expand it to cover "24 months or longer." Reportedly, the funds were raised through the issuance of 8.2 million shares last week, enough to cover the company’s total interest expenses for the next 21 months. Currently, MicroStrategy’s annual interest and preferred stock dividend payments are around $800 million. The move is meant to ensure that even if capital markets lose interest in its stocks and bonds, the company won’t be forced to sell Bitcoin in the short term. CEO Phong Le admitted in a recent episode of the podcast "What Bitcoin Did" that **the move is a preparation for the “Bitcoin winter.”** Founder Michael Saylor said that the reserve “will help us better navigate short-term market volatility.” “Never Sell” Myth Broken? The core change in this strategy is MicroStrategy’s first-ever acknowledgement of the possibility of selling Bitcoin. The potential condition for selling is tied to the company’s self-created “mNAV” indicator, which compares the company’s enterprise value (market cap plus debt minus cash) to the value of its cryptocurrency holdings. CEO Phong Le made it clear: **“I hope our mNAV does not fall below 1. But if we really get to that point, and have no other financing channels, we will sell Bitcoin.”** This statement is highly significant. For a long time, Michael Saylor has been known as a staunch Bitcoin evangelist, transforming MicroStrategy from a small software company into the largest corporate Bitcoin holder in the world, with the core strategy of continuously buying and holding for the long term. Currently, the company holds about 650,000 Bitcoins valued at approximately $56 billion, accounting for 3.1% of the total global Bitcoin supply. Its enterprise value is about $67 billion. If the mNAV drops below 1, it means the company’s market valuation (after deducting debt) is less than the value of its Bitcoin holdings, which will severely undermine its business model. Imminent Debt Pressure Behind the establishment of the dollar reserve is the significant debt pressure MicroStrategy faces. The company has financed Bitcoin purchases through issuing stocks, convertible bonds, and preferred shares, and currently carries $8.2 billion in convertible bonds. If the company’s stock price continues to lag, the holders of these bonds may opt to demand cash repayment of the principal, instead of converting to shares, putting great pressure on the company’s cash flow. When S&P Global gave MicroStrategy a “B-” credit rating on October 27, it specifically highlighted the “liquidity risk” posed by its convertible bonds. S&P warned: “We see a risk that, in the event of severe pressure on Bitcoin prices, the company’s convertible bonds could mature simultaneously, which may force the company to liquidate its Bitcoin during weak prices, or undertake debt restructuring we might consider a default.” The specific pressure is already looming. Available data shows that holders of bonds worth $1.01 billion can demand repayment of principal on September 15, 2027. In addition, over $5.6 billion of “out-of-the-money” convertible bonds may need to be redeemed in cash in 2028, creating hidden risks for the company’s long-term financial stability. Traders’ Interpretation: Prudent Hedging or “Prelude to Selling”? Although MicroStrategy’s CEO emphasized that Bitcoin would only be sold under extreme conditions, traders have clearly begun to “over-interpret” these statements in the sensitive market environment. Despite the company’s insistence that its long-term accumulation strategy remains unchanged, traders worry that the latest comments introduce a potential path toward selling. This concern has quickly turned into action, raising risk-aversion sentiment. Regarding CEO Phong Le’s point that “when the share price is lower than the value of underlying assets and with restricted financing, selling Bitcoin is mathematically sound,” the market responded in two sharply contrasting ways: Pessimists read between the lines: Many crypto traders speculate that **these seemingly offhand comments could be a signal that the world’s largest corporate holder is preparing to sell some of its Bitcoin. One user on social media platform X sarcastically said, “Can’t wait to see them sell at the bottom.” Another commented, “Sounds like standard corporate PR talk, but they better not sell at the wrong time.”** Rationalists see this as inevitable: Some believe CEO Phong Le is simply acknowledging the constraints any listed company faces when its market value is less than its asset value. An investor pointed out: “The point is not that they may sell, but how firmly committed they are before the option becomes reality.” To reassure the market, MicroStrategy later stated on X that even if Bitcoin prices fall back to the average purchase price of about $74,000, its assets would still be several times enough to cover its outstanding convertible bonds; they even claimed that even if it fell to $25,000, asset coverage would be more than twice the liabilities. Founder Michael Saylor also continued to show confidence, announcing on Monday that the company bought another 130 BTC for $11.7 million. Market Response and Performance Warnings MicroStrategy’s latest moves and concerns about a strategic shift triggered an immediate negative reaction in the market. On Monday, its share price hit an intraday low of $156, and though it recovered by the close, it was still down 64% from its 52-week high in mid-July. This year, the stock has dropped nearly 41%. Meanwhile, Bitcoin was not spared, falling more than 4% to about $86,370. Aside from the company's own strategy changes, wild swings in the broader market have also been the "final straw" dragging the stock price down. Monday saw a clear risk-off tone in the market—on one hand driven by hawkish remarks from the Bank of Japan squeezing yen financing, and on the other by turmoil in the crypto sector itself. Relevant charts show the current market’s extreme sentiment: Bitcoin purchasing power shrinks: A year ago, one Bitcoin could buy 3,500 ounces of silver; now it can only buy 1,450 ounces, the lowest since October 2023. This sharp drop directly shows the weakness of crypto assets relative to traditional safe havens like silver. Options market targeting: Data from SpotGamma shows MicroStrategy (MSTR) faces a typical "over-leveraged target under attack" scenario. Lots of long puts are concentrated below $170. The negative gamma effect means that if Bitcoin drops further, market maker hedging could accelerate declines in MSTR, Coinbase, and other crypto stocks, and even drag down major indices. Macro headwinds: As expectations for a Bank of Japan rate hike rise, carry trades face pressure to unwind, and as the most speculative asset class, cryptocurrencies are hit first. Bitcoin hovered around $84,000, suffering its worst one-day loss since March 3; Ethereum fell below $3,000. In addition to stock price pressure, the company’s performance outlook has also flashed red. MicroStrategy estimates that if Bitcoin closes the year between $85,000 and $110,000, its annual performance may range from a net loss of $5.5 billion to a net profit of $6.3 billion. This sharply contrasts with the company’s October 30 financial statement forecasting a net profit of $24 billion for 2025. Risk Warning and Disclaimer The market has risks, and investments need caution. This article does not constitute personal investment advice and does not take into account each user’s specific investment objectives, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article are appropriate to their particular situation. Investments made based on this article are at the user’s own risk.