S&P Global Ratings has given MicroStrategy a 'B-' credit rating, placing it in the speculative, non-investment-grade category often referred to as a junk bond. The agency cited the company's high Bitcoin concentration, narrow business focus, weak risk-adjusted capitalization, and low US dollar liquidity as primary weaknesses, while maintaining a stable outlook based on prudent debt management.
MicroStrategy, led by Michael Saylor, holds 640,808 BTC, valued at approximately $74 billion, acquired mainly through equity and convertible debt financing. S&P highlighted an inherent currency mismatch, with all debt denominated in US dollars while reserves are largely tied to Bitcoin, posing liquidity risks. The agency warned that during severe Bitcoin price stress, the company might be forced to liquidate holdings at depressed prices, potentially viewed as a default.
Despite the rating, MicroStrategy's stock rose 2.27% on the announcement day, and the firm has shown strong capital market access. However, S&P stated an upgrade is unlikely in the next 12 months unless MicroStrategy increases US dollar liquidity, reduces convertible debt reliance, and sustains funding access during Bitcoin downturns. The rating marks the first assessment of a Bitcoin-focused company, setting a benchmark for traditional finance evaluation.
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