MicroStrategy Options Sold Off by Company Executives

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In Brief
  • MicroStrategy Chief Financial Officer Le Phong and Chief Technology Officer Timothy Lang exercised about 30% of their options in August.

  • According to a filing from the SEC, both made about $7 million and still retain about 20,000 options.

  • Despite realizing the earnings, the move puts the executives at odds with the company’s Chief Executive Michael Saylor.

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MicroStrategy Chief Financial Officer Le Phong and Chief Technology Officer Timothy Lang exercised about 30% of their options in August.

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On Aug 26, Lang exercised 10,000 options then sold all the converted shares, receiving approximately $7.1 million. Earlier, between Aug 2 and 6, Phong exercised 20,000 options, subsequently selling the shares for $7.3 million. According to a filing from the SEC, both still retain about 20,000 options.

Despite realizing the earnings, the move puts the executives at odds with the company’s Chief Executive. Michael Saylor, the driving force behind the company’s Bitcoin strategy, has not sold any of his shares, the filing reveals. 

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Internal discontent

Although converting options is a prerogative of executives, these sales occurred as a result of Saylor’s bitcoin strategy. Since August 2020, Saylor has added over $2 billion of bitcoin to the enterprise software maker’s balance sheet. The company has also issued hundreds of millions in convertible bonds to fund the continued purchase of Bitcoin.

Shares in the company have largely benefitted from this strategy so far, reflecting gains similar to bitcoin. As the stock surged almost fivefold in the past year, many investors bought shares to effectively gain exposure to bitcoin. 

Despite this success, the sell-off may indicate internal discontent with bitcoin’s persistent volatility. Chief market strategist at Miller Tabak + Co. Matt Maley believes company officials could be concerned that Saylor has gotten distracted from the core business. “Senior executives do not sell stock if they think it’s going higher,” said Maley. “It’s just a bad sign no matter how you slice it.”

MicroStrategy’s latest purchase

MicroStrategy’s latest purchase of Bitcoin came just over two weeks ago. Saylor announced on Aug 23 that MicroStrategy had purchased an additional 3,907 BTC with proceeds from ATM facility sales. The purchase was made for $177 million in cash at an average price of $45,294 per bitcoin.

MicroStrategy now holds 108,992 BTC acquired for $2.918 billion at an average price of $26,769 per bitcoin.

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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