MicroStrategy (NASDAQ:MSTR) is rewriting the rules of Bitcoin investing, and investors are taking notice. The stock is up a jaw-dropping roughly 500% this yearblowing past Bitcoin’s 128% gainthanks to Executive Chairman Michael Saylor’s audacious plan to leverage the cryptocurrency like no one else. With over 402,000 bitcoins on its balance sheet, worth $38.4 billion at today’s prices, the company’s market cap has soared to $85 billion. That’s more than double the value of its Bitcoin stash, a gap Saylor explains as the magic of leveraging Bitcoin. Simply put, they’re borrowing, buying, and betting bigand so far, it’s paying off.
This week, MicroStrategy added another 15,400 bitcoins to its hoard, spending $1.5 billion at an average price of $95,976 per coin. Even as Bitcoin dipped a bit lower, the stock climbed in premarket trading, showing investors are sold on Saylor’s playbook. Analysts like Mark Palmer at Benchmark have doubled down on optimism, slapping a $650 price target on the stocka juicy 65% upside. Behind the scenes, MicroStrategy’s strategy involves issuing stock and convertible bonds to fuel its buying spree. The result? A 63.3% Bitcoin yield this year and an unshakable commitment to owning as much crypto as possible.
Saylor doesn’t sugarcoat the riskthis is a high-wire act. From losing $6 billion in a single day during the dot-com bust to betting his entire company on Bitcoin in 2020, he’s no stranger to volatility. But his philosophy is clear: go big or go home. With plans to raise $42 billion over the next three years to keep buying Bitcoin, MicroStrategy is either setting itself up as the ultimate crypto king or testing the limits of just how far you can push the Bitcoin leverage game. For now, investors seem happy to come along for the ride.
This article first appeared on GuruFocus.
