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Jim Cramer Takes Aim at MicroStrategy as BTC Plunge Leaves Firm in $1B Loss, Risks Liquidation

2 mins
Updated by Kyle Baird
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In Brief

  • Mad Money's Jim Cramer has taken potshots at MicroStrategy CEO Michael Saylor, as bitcoin prices plunged.
  • The decline has left MicroStrategy holding BTC at a loss of about $1 billion, and at the risk of liquidation.
  • Cramer believes that Slicon Valley tech executives consider crypto a fraud.
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Jim Cramer, a stock market pundit and host of CNBC television’s “Mad Money.” has taken potshots at MicroStrategy CEO Michael Saylor following a sharp decline in the price of bitcoin (BTC), which plunged to new 18-month lows on Monday.

Cramer, who has courted controversy with some of his views on bitcoin, criticized the U.S. software company’s BTC “strategy,” stated publicly by Saylor as one of “hodling” — meaning that he has no intention to sell, even as prices plummet.

“As bitcoin plunges, keep in mind that MicroStrategy’s ‘strategy’ is worth watching,” Cramer mocked, in a tweet.

MicroStrategy holds bitcoin at a $1 billion loss, faces liquidation

With bitcoin evangelist Saylor at the helm, MicroStrategy has amassed around 129,200 BTC bought at an average price of $30,700, or about $3.96 billion in total. It is the largest holding of bitcoin by any publicly traded company.

But the value of the stash dropped to $2.97 billion after the price of BTC tumbled more than 17% in a day to $23,000 on Monday. That’s a loss of just under $1 billion for the Nasdaq-listed company, which provides business intelligence, mobile software, and cloud-based services.

MicroStrategy is now at risk of liquidation should the BTC price fall below $21,000, according to analysts. The company borrowed billions of dollars to buy bitcoin. In March, it used its BTC holdings as collateral to take out a $205 million loan with Silvergate Bank in order to buy even more bitcoin.

While Saylor maintains his “hodl” strategy, MicroStrategy chief financial officer Phong Le said during an earnings call earlier this year that the company may have to post more collateral or sell some of its BTC in the event of a margin call.

At the time of press, shares of MicroStrategy are down 27% at $146. The stock has tanked more than 70% on a year-to-date basis.

Cramer mocks Celsius amid liquidity crunch concerns

Jim Cramer, the Mad Money host, bought a significant amount of bitcoin when it traded for about $12,000. He later sold the cache when the price hit $64,000 sometime in 2021, and used the proceeds to “pay off a mortgage.”

He has often issued mixed signals regarding cryptocurrency, but has also recommended that investors put at least 5% of their portfolios in digital assets, preferably bitcoin and ethereum, which he considers “legitimate”.

As crypto markets crashed on Monday, Cramer took the opportunity to throw shade at crypto lender Celsius. BeInCrypto reported earlier on June 13 thàt Celsius may be facing a severe liquidity crunch, which has forced it to suspend account withdrawals. He said:

“When i had SEC Chairman Gary Gensler on last year we talked about how it was possible that i was getting 8% on my crypto balance and he said it wasn’t; as the Celsuis Community just found out.”

Cramer believes that Silicon Valley tech executives have started to consider the cryptocurrency industry a fraud, which has benefited its promoters at the expense of retail investors.

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Jeffrey Gogo
Jeffrey Gogo is a Zimbabwean financial journalist with more than 18 years of experience covering local and global financial markets; economic and company news. A climate change enthusiast, Gogo first encountered bitcoin in 2014 and began covering crypto markets in 2017.