Microstrategy business
I guess all of you know THE Bitcoin Company, Microstrategy and its famous chairman Michael Saylor. This guy is issuing debt and buying the orange coin since about four years now and $MSTR is sitting on a stack of ~450k BTC at the moment which is more than 2% of the whole supply ever.
The company is or better was basically a software house but these days that is a rather small position compared to the „BTC business“. Their Software unit achieved roughly 500M USD of revenue in 2023 vs a Bitcoin stack which is currently valued 43B = 43,000M USD. A difference of almost 100x and it shows that the value of Microstrategy is significantly based on their Bitcoin and the evolution of this asset.
The standard investment case
If we expect Bitcoin to be adopted more and more, the demand will rise. And if the company will accumulate more and more BTC it will own a decent part of the scarcest asset on earth. If the company owns more and more Bitcoin and their valuation goes up, so will the value of $MSTR and the price of its stock. Thats the basic investment case for everybody buying the stock.
Risks attached
Of course this is quite some IFs and the adoption, as we know, goes in waves, so the price of the $MSTR stock is not a one way street. It went up during bull phases but saw big consolidations in between. What will happen once this bullmarket is over somewhere within the next 12 months? How far will it fall?
We can also ask if Saylor really will be able to continuosly raise more capital to buy more Bitcoin. The company announced just a few months ago a 42B USD plan to aquire many additional BTC. Will that work? And what about all this debt? Will that become a problem within a couple of years?
My speculative approach
There‘s risks attached but the risk/reward ratio in my view is good enough to step in now. Bitcoin is consolidating and the stock came back from the hype it saw after the Trump election. Although the company is still valued about 1.5X higher than their BTC stack and Software business is worth, the stock price will most probably rise to new ATH once Bitcoin starts the next rallye. For me I expect a 150-200k Bitcoin this year and Microstrategy to go 2-3x from the current $300 once that happens. That’s why I started to accumulate the stock though it will remain a small position in my portfolio due to the risks and volatility. Plan is to hold until the peak of the bullrun and then sell for a nice profit.
What is your opinion about Microstrategy?
One of the latest Interviews of Saylor with outlook for 2025.
It’s my first time knowing the Microstrategy company though
Interesting stock imo
I first heard of MicroStrategy from @vikisecrets' blog. In my opinion, his strategy of issuing debt to buy bitcoin is too risky. I dont think i can take it.
Fair point, thats a risk for sure. We will see how it will turn out. I myself think that Saylor is no scammer and will know what he is doing.
If you take a closer look, you will see that Sailor does much more than just take on debt and buy Bitcoin. He only did that at the beginning. Rather, he used the blatant overvaluation of the share to issue new shares and use them to buy Bitcoin. Although this dilutes the shares, in the end they will be less diluted than Bitcoin is bought. So far, the proportion of Bitcoin per share has increased every time, despite the dilution.
Blocktrainer has made 1-2 illustrative videos on this.
I also bought a share today. Only for €100, but it can't do any harm. I'm so deeply attached to crypto, why not get even more attached to Bitcoin 😅.