Insiders sold Microstrategy stock after Bitcoin's bull run
Virginia-based enterprise software company Microstrategy has captured the attention of crypto and financial news outlets alike with its CEO’s atypical strategy of going all-in on Bitcoin, beginning in 2020, with some reporters quipping that the company has since morphed into something closer to a Bitcoin (BTC) investment vehicle than a software firm.
Recent filings with the United States Securities and Exchange Commission suggest some of the company’s top-level executives are ambivalent about pursuing this strategy long-term
The filings reveal that Microstrategy’s chief financial officer Le Phong and chief technology officer Timothy Lang both unloaded stock in August of this year by exercising roughly 30% of the options they received as compensation.
As Bloomberg reports, Lang exercised 10,000 of his awarded options on Aug. 26 and later sold all the converted shares, pocketing roughly $7.1 million. Phong, for his part, exercised 20,000 options between Aug. 2 and 6, then sold the shares in return for a little over $7.3 million. Each has held on to roughly 20,000 options.
CEO Michael Saylor has not himself sold any shares since 2012, although he did reallocate 50,000 shares of Class A company stock to another of his firms, Alcantara LLC, this January.
The report notes that, while exercising options is commonplace for executives, Phong and Lang’s moves were made without a pre-arranged trading plan. Matt Maley, chief market strategist at Miller Tabak + Co., has claimed that the decision may be indicative of their concerns about the long-term viability of Saylor’s corporate strategy and his commitment to tying the company’s fate so closely to that of Bitcoin. “Senior executives do not sell stock if they think it’s going higher. It’s just a bad sign no matter how you slice it,” Maylor reportedly said.
As of June 30, 2021, MicroStrategy held an approximate 105,085 BTC, with Saylor doubling down on his crypto strategy in late July by pledging to continue to amass more BTC. Earlier in June, the firm had announced a $400 million debt raise to expand its Bitcoin treasury holdings and in August, Microstrategy added a further 3,907 BTC to its holdings, bringing its total to 108,992 BTC, at a cost of $2.918 billion to the company.
Related: 3 Reasons Why MicroStrategy Adopted Bitcoin — And Why Others Will Too
As of the time of writing, Microstrategy stock is down close to 9.4% on the day and just over 77% over the past six months. Ed Moya, a senior market analyst at Oanda Corp., has however argued that Phong and Lang’s sell-offs are unlikely to discourage Microstrategy investors who share Saylor’s commitment to Bitcoin, given that the CEO’s “relentless support for Bitcoin has made the company a cryptocurrency trade and not necessarily a bet on the company’s software solutions and services.” He added that “The share price will likely continue to go the direction of Saylor and his bet on Bitcoin.”