As an analyst with over two decades of experience observing and analyzing the stock market, I must admit that MicroStrategy has been one of the most intriguing cases in recent years. The company’s bold move into Bitcoin has not only paid off handsomely but also set a precedent for other publicly traded companies.
MicroStrategy garnered attention when it started openly purchasing Bitcoin as early as 2020. Although other publicly-traded companies have followed suit, MicroStrategy’s bold approach to Bitcoin stood out distinctly. Today, it boasts the largest BTC holdings among public companies globally, amassing over $5 billion in profits thus far. Notably, the substantial profit generated from its Bitcoin investments is not the sole advantage; it has also brought about other benefits for the company.
MicroStrategy’s Stock Price Blows Up
2021 was an exceptionally prosperous year for MicroStrategy’s MSTR stock, outperforming many other stocks in the market. A mere 12 months ago, the MSTR stock was trading at a modest $45. But with Bitcoin prices rebounding and MicroStrategy’s Bitcoin holdings expanding, so did its own stock value.
In only one year, the price surged more than 317% to reach a new all-time high of $192 back in March 2024, according to data from TradingView. This put it above its previous February 2000 peak of $139, making it its highest level in more than two decades. Interestingly, the surge to the $192 all-time high in March coincided with the the Bitcoin all-tine high of $73,750 in the same month.
It appears that the MicroStrategy stock price tends to mirror the fluctuations in Bitcoin’s price performance. This makes sense because Bitcoin now forms a significant portion of the company’s assets. When Bitcoin’s value goes up, so does the worth of the company, leading to an upward trend in its stock price.
At this moment, it’s priced at $167, representing a 16% decrease from its peak of $192. Yet, it’s more than doubled compared to where it was a year ago at $45. This sets it apart from companies like Apple, which has only seen a 24% growth this year, and Amazon, with a 34% yearly increase. Even NVIDIA’s strong performance doesn’t surpass MicroStrategy, which has increased by an impressive 155% this year.
Padding Up With Bitcoin
Despite being four years into its Bitcoin investment, MicroStrategy continues to ramp up its Bitcoin acquisitions this year. In 2024, the company has added 63,079 BTC to its portfolio at approximately $4.04 billion. Their most recent purchase of 7,420 BTC on September 20 cost $489 million, bringing their total Bitcoin holdings to a staggering 252,200 worth around $9.9 billion.
Regardless of its substantial existing Bitcoin holdings representing over 1.166% of the total circulation, MicroStrategy intends to keep acquiring additional Bitcoin. The company has disclosed its intention to issue convertible notes worth $700 million (later increased to $1 billion), with the funds generated through this offering intended for the purchase of further Bitcoin.
Regarding the company’s strategy with its substantial Bitcoin reserves, it appears they don’t intend to sell off their Bitcoin holdings anytime soon. Instead, their current plan seems geared towards acquiring more Bitcoin and keeping it as a valuable treasury asset.
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2024-09-27 15:40