MicroStrategy's Debt Wiped by Dollar Reserves

MicroStrategy's stock has rallied by 12% after the company announced that its dollar reserves now nearly offset its $6.75 billion debt, reducing net leverage to a mere 0.1%. The news comes as a relief for investors who had been fearing that the company would be forced to sell its Bitcoin holdings to cover obligations.

The company's chart shows that it holds $6.69 billion in dollars against $6.75 billion of debt, with a gap of just $60 million. The centerpiece is a $5.10 billion reserve earmarked for dividend and interest payments, which has swelled due to the firm raising $3.28 billion this month.

The fear was never abstract, as MicroStrategy had sold 1,638 BTC in July at roughly $64,000 per coin. However, with cash matching nearly all of its debt, that case is now weakened considerably.