MicroStrategy Announces Fresh 1,070 Bitcoin Purchase, MSTR Stock Shoots 4.5%

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MicroStrategy’s Bitcoin investments continue with a fresh infusion of 1,070 Bitcoins worth approximately $102 million. This move has stirred optimism among investors as the Bitcoin price jumped by 3.6%, breaching the significant barrier of $100,000.

According to the company’s recent announcement, this transaction occurred approximately on December 30th when Bitcoin was being traded at around $94,000. This event has contributed to a 4.5% increase in MicroStrategy’s stock price today, pushing it above $350 per share as of the current reporting time.

MicroStrategy has made its first BTC purchase since declaring its intention to raise funds through perpetual preferred stock for additional buys. Moreover, this marks the ninth straight week of Bitcoin purchases by the company as Executive Chairman Michael Saylor continues to strengthen the firm’s commitment to acquiring more Bitcoin.

Through this recent acquisition, MicroStrategy now owns a grand total of 447,470 Bitcoins, currently valued at approximately $45.3 billion. This equates to an average purchase price of around $62,470 per Bitcoin. Given these figures, it’s clear that MicroStrategy has realized a significant profit on its investment, amounting to roughly 62%.

In the fourth quarter, the Bitcoin-focused company disclosed an additional $1 billion in losses due to impairment. But with the shift to fair-value accounting for their cryptocurrency assets, the company’s total assets will increase from $17.9 billion to approximately $24 billion. Furthermore, MicroStrategy is expected to earn a BTC return of 48% for Q4 in 2024, and an impressive 74.3% yield for the entire financial year (FY) 2024.

Benchmark Analysts See 91% Upside In MicroStrategy (MSTR) Stock

As a researcher, I’m excited about the remarkable surge in MicroStrategy (MSTR) stock performance for the year 2024. This stock soared an astounding 330%, outpacing Bitcoin’s gains by a factor of three. The insightful analyst Mark Palmer has maintained his “buy” recommendation, predicting the stock could reach $650—a potential increase of 91% from its current price. This bullish stance underscores MicroStrategy’s expanding Bitcoin holdings and the thriving potential of their software business.

As a crypto investor, I find it convincing that Mastercard (MSTR) is venturing into the perpetual preferred market. This move, in my view, demonstrates the substantial shareholder value they’ve been building through their treasury operations. This fact, as pointed out by Benchmark analyst Mark Palmer, seems to validate the premium at which MSTR’s stock trades compared to its net asset value.

Last Friday, MicroStrategy disclosed their intention to gather approximately $2 billion during the first quarter of 2025 through one or more issuances of perpetual preferred shares. These shares will be given priority over the company’s Class A common stocks. This move is an element of a larger scheme to amass around $42 billion in capital by 2027, which they plan to accomplish through continuous stock sales and offerings of convertible debt.

In simpler terms, Michael Saylor, the executive chairman, announced that the company has reached about 67% of its goal for increasing its funds through stock sales. MicroStrategy needs to keep getting additional capital to continue buying Bitcoin, as its main software business has reported losses in three out of the last four quarters.

Palmer pointed out that offering perpetual preferred stocks might draw in investors who prefer less volatile options, like insurance firms, retirement plans, and financial institutions.

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2025-01-06 19:43