CEO Phong Le states that the company’s balance sheet remains solid despite recent losses of $12.6 billion.
Strategy reported a net loss of $12.6 billion in the fourth quarter, primarily due to unrealized losses on its bitcoins. Despite this negative result, CEO Phong Le reassured investors about the company’s financial strength during the quarterly earnings conference call.
Le specified that Bitcoin’s price would need to drop to $8,000 and remain at that level for five or six years before representing a real threat to the company’s convertible debt service. “In the extreme case of a 90% drop in Bitcoin’s price, with the price at $8,000, that would be the point where our Bitcoin reserve equals our net debt, and we would no longer be able to repay our convertibles using the Bitcoin reserve,” Le stated.
CFO Andrew Kang attributed the negative results to the “end-of-quarter decline in Bitcoin value under our mark-to-market accounting,” while emphasizing the company’s long-term approach. Strategy saw its MSTR shares plummet 17.12% on Thursday to $106.9, with a 72% decline over the past six months.
Executive Chairman Michael Saylor also addressed quantum computing concerns during the call, calling them part of a “parade of horrible FUD” around Bitcoin. “We think it’s probably 10 or more years away before there’s a threat, that’s the consensus,” Saylor declared, adding that Bitcoin is upgradeable and can be made stronger through global consensus.
To support quantum resistance solutions for Bitcoin, Saylor announced that Strategy will launch a Bitcoin Security program that will coordinate with global cybersecurity, cryptographic, and Bitcoin communities.
