Why did MicroStrategy's stock soar in September? The gains start and end with Bitcoin, but there's more to the story.
MicroStrategy MSTR has become one way many investors have found to get into Bitcoin BTC/USD. Looking at the returns of the two over the past three years, investing in MicroStrategy has been far superior to investing in Bitcoin.
Shares of MicroStrategy Inc (MSTR, Financial) surged 4.53% in mid-day trading on Oct 2. The stock reached an intraday high of $170.10, before settling at $170.07, up from its previous close of $162.70.
MicroStrategy's innovative strategy of leveraging cheap debt to invest in Bitcoin has significantly increased its market cap from $1.44 billion to over $30 billion in five years. By issuing non-recourse debt at sub-1% interest rates and consistently buying Bitcoin, MicroStrategy has created a self-sustaining cycle of stock price appreciation. The company's increasing Bitcoin per share metric offers direct exposure to Bitcoin's growth, positioning MicroStrategy as a pioneer in a new corporate treasury model.
U.S. stock futures were slightly lower this morning, with the Nasdaq futures falling around 0.1% on Monday.
MicroStrategy NASDAQ: MSTR has become one way many investors have found to get into Bitcoin (BTC). Looking at the returns of the two over the past three years, investing in MicroStrategy has been far superior to investing in Bitcoin.
Michael Saylor recently predicted that Bitcoin would hit a price of $13 million by 2045. To do so, Bitcoin would need to generate annualized returns of 30% for the next two decades.
MicroStrategy's share price skyrocketed over 100% in 2024, although its software business is seeing a year-over-year revenue decline. The firm is working to revitalize its business as it transitions to a software-as-a-service model.
MicroStrategy's all-in Bitcoin strategy assumes that Bitcoin will generate annualized returns of 30% or more during the next two decades. MicroStrategy is using debt to buy as much Bitcoin as possible, with the assumption that it will remain the top-performing crypto.
MicroStrategy Inc MSTR continues its audacious bet on Bitcoin BTC/USD, recently purchasing $1.11 billion worth of the cryptocurrency between August and September.
Shares of crypto-adjacent name MicroStrategy Inc (NASDAQ:MSTR) are 4.2% lower today, last seen trading at $135.56, falling alongside Bitcoin (BTC).
Why This Company's All-In on Crypto and What It Means for Investors