MicroStrategy, a prominent American company specializing in business intelligence and cloud-based services, has witnessed its stock values soar to a 2-year high. As reported by NASDAQ, the company’s stock, known as MSTR, comfortably surpassed the $500 mark on Black Friday. This peak is a milestone not achieved since December 2021, elevating the market value of the New York-based tech-heavy exchange to a staggering $7.33 billion.
Bitcoin: A Catalyst for Growth
The surge in MicroStrategy’s fortunes is primarily attributed to its substantial Bitcoin holdings. On September 24, the Tysons Corner, Virginia-based corporation, boasted ownership of 158,245 Bitcoin tokens, acquired at a total investment of $4.68 billion. This strategic move, initiated by founder and chairman Michael Saylor in August 2020 as a hedge against inflation, has paid off handsomely.
The beginning of the year wasn’t promising for MicroStrategy, which reported a quarterly loss. However, within a month, the company’s stock price astonishingly doubled. By April 2023, MicroStrategy’s Bitcoin assets flourished, with the average purchase price of its digital assets dropping to $29,803 per coin. This was after acquiring an additional 1,045 coins, bringing the total to 140,000.
Despite a $24 million Bitcoin impairment charge in its second-quarter earnings, MicroStrategy’s overall profitability bounced back. The company continued its aggressive Bitcoin acquisition strategy, amassing 152,800 coins valued at approximately $4.4 billion. This strategy proved effective, as the stock of companies exposed to Bitcoin outperformed the cryptocurrency itself, which had already seen an 87% gain within the year.
The most recent quarterly report in early November painted a less rosy picture, showing a net loss of $143.4 million, significantly more profound than the $27 million loss during the same period the previous year. Nevertheless, MicroStrategy remained steadfast in its Bitcoin strategy, investing an additional $167 million to purchase 6,067 more.
Future Outlook
MicroStrategy is one of the largest institutional investors in cryptocurrencies, holding approximately 0.75% of all Bitcoin in circulation. Speaking to CNBC, Michael Saylor expressed optimism for the next 12 months, citing a likely increase in demand against a backdrop of decreasing supply – a scenario he describes as “relatively unprecedented in Wall Street history.”
This bullish outlook, driven by a strong belief in the potential of Bitcoin, keeps MicroStrategy at the forefront of institutional investment in cryptocurrencies.
