What happened
Shares of the business intelligence company MicroStrategy (MSTR -2.00%), which also buys and holds a lot of Bitcoin, were more than 10% higher as of 2:54 p.m. ET today after the company said it plans to continue to buy and hold Bitcoin.
So what
At the end of the first quarter of this year, MicroStrategy held more than 129,218 Bitcoin tokens, which had a market value of $5.9 billion at the end of the quarter. The price of the cryptocurrency has fallen about 37% this year, and traded at about $30,150 as of this writing.
Image source: Getty Images.
On top of that, a subsidiary of MicroStrategy recently took out a $205 million loan that is collateralized by Bitcoin. If the price of the crypto falls below $21,000, the company could face a margin call.
"At this time, we do not have any intention to sell," chief financial officer Andrew Kang said yesterday, according to The Wall Street Journal. "There are no scenarios that I'm aware [in which] we would sell."
"Some of the more recent volatility was certainly around some of the activity outside of Bitcoin," Kang said. "For us, we monitor that from a market perspective, but there [isn't] anything fundamental to Bitcoin that we believe presents any issues against our strategy."
Now what
While I am a long-term believer in Bitcoin, it's hard to pay attention to MicroStrategy's core business with so much seemingly riding on the price of the token. The business and its stock are also going to be volatile with such price swings in the digital currency. Personally, I'd rather just invest in actual Bitcoin than this company.
