In a surprising twist, MicroStrategy, a top American business intelligence and cloud-based services company, has seen its stock values skyrocket to a 2-year high.
According to NASDAQ, MicroStrategy’s stock (MSTR) not only crossed but comfortably soared past the $500 mark on Black Friday, marking a significant achievement not seen since December 2021 and pushing the New York-based tech-heavy exchange’s market value to a whopping $7.33 billion.
MicroStrategy’s outstanding performance is closely linked to its sizable Bitcoin holdings. As of September 24, the Virginia-based company proudly owned 158,245 Bitcoin tokens, bought for an impressive total of $4.68 billion. This strategic move, led by founder Michael Saylor in August 2020 as a hedge against inflation, has paid off handsomely.
A Beautiful Recovery
The year didn’t start well for MicroStrategy, reporting a quarterly loss. However, the company’s stock price doubled within a month. By April 2023, MicroStrategy’s Bitcoin assets flourished, with the average purchase price dropping to $29,803 per coin after acquiring an additional 1,045 coins, bringing the total count to 140,000.
Despite facing 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, accumulating 152,800 coins valued at approximately $4.4 billion. This strategy proved effective, as the stock of companies tied to Bitcoin outperformed the cryptocurrency itself, which had seen an 87% gain within the year.
The recent November quarterly report painted a less rosy picture, revealing a net loss of $143.4 million, significantly deeper than the $27 million loss during the same period the previous year. Nevertheless, MicroStrategy stayed committed to its Bitcoin strategy, injecting an additional $167 million to purchase 6,067 more coins.
MicroStrategy has solidified its position as one of the largest institutional investors in cryptocurrencies, currently holding approximately 0.75% of all Bitcoin in circulation. In a CNBC interview, Michael Saylor expressed optimism for the next 12 months, predicting a surge in demand against a backdrop of decreasing supply – a scenario he aptly describes as “relatively unprecedented in Wall Street history.”
This optimistic outlook, fueled by a steadfast belief in the potential of Bitcoin, keeps MicroStrategy at the forefront of institutional investment in cryptocurrencies.
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