The company could face a large payment to secure a bank loan
May 6, 2022
Tysons-based enterprise software company MicroStrategy Inc., best known for its $1 billion purchase of Bitcoin since 2020, has announced that Andrew Kang will be its new senior executive vice president and chief financial officer, at from next week.
Kang succeeds Phong Le, who served as chief financial officer and chairman. After Kang’s start date, on or around May 9, Le will continue as president. The change of direction comes as the news has fallen that MicroStrategy will have to pay more cryptocurrency to back a $205 million loan from Silvergate Bank if the price of Bitcoin falls below $21,000, or about 50% from current levels, Le said during a briefing. an earnings call on Tuesday.
Kang has served as executive vice president and chief financial officer of Atlanta-based technology company GreenSky Inc. since September 2020, MicroStrategy said in a statement announcing the May 3 hire. He was also treasurer of Santander Holdings USA, the $150 billion holding company. under Banco Santander SA, and executive vice president of auto finance company Santander Consumer US. He has also worked for Exeter Finance, HSBC Finance, Capital One and Thomson Reuters. Kang earned a bachelor’s degree in biology and a certificate in accounting from the University of Virginia.
“We are delighted to welcome Andrew to our leadership team,” MicroStrategy founder and CEO Michael Saylor said in a statement. “Andrew has extensive financial leadership and capital markets experience, making him an excellent choice as MicroStrategy’s next CFO. I believe he will make a significant contribution to our business as we continue to run MicroStrategy’s enterprise software and bitcoin strategies.
MicroStrategy has been an aggressive supporter of Bitcoin, and Saylor is the chief cryptocurrency evangelist. In an earnings call on Tuesday, Le said MicroStrategy is looking “to acquire and hold Bitcoin for the long term. We view our bitcoin holdings as long-term holdings and do not currently plan to engage in the sale of bitcoin,” according to a transcript.
As of March 31, the company had 129,218 bitcoins acquired for a total of $3.97 billion, or $30,700 per bitcoin, and the market value of its holdings was $5.9 billion, Le said. Of those coins, about 19,500 are pledged as collateral for a Bitcoin-backed loan, while more than 95,600 “remain unplugged and unencumbered,” Le said.
Although the value of the currency has fallen in recent months, Le said MicroStrategy is “insulated from short-term market volatility in Bitcoin prices since we currently have no debt principal maturities coming up until now. in March 2025″. The company also has cash flow generated from its software business to cover interest obligations and it maintains a “certain minimum amount of cash balance to fund our regular working capital requirements,” he said. .