MicroStrategy, the business intelligence firm and the world’s largest corporate Bitcoin holder, currently holds 252,220 BTC. The asset, acquired at a total cost of about $9.9 billion, has soared considerably. At the current Bitcoin price of $687,300, MicroStrategy holds over $17 billion.
The business intelligence firm has entered a bull season and recorded another impressive milestone. MicroStrategy’s stock hit an all-time high (ATH) after gaining over 10% to reach a 25-year high. According to TradingView data, the stock price was pegged at $235.89 at the close of the market on Thursday.
MicroStrategy’s Consistent Bitcoin Acquisition Pays Off
The business intelligence firm’s stock, which has a market capitalization of $43.6 billion, currently trades at a premium.
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MicroStrategy’s Bitcoin approach has paid off, as it has raked in massive profits since adopting it in August 2020. So far, it has raised $4.25 billion from five of its equity offerings. Overall, MicroStrategy’s stock has witnessed astronomical growth since 1998.
According to Mark Palmer, a Benchmark analyst, MSTR has hit a 17.8% yield year-to-date since adopting the Bitcoin strategy. To compensate for the fast-growing stock, the price target has soared to $245 per share.
Palmer says the MSTR share price has risen by 1,600% in the past four years. In his view, additional price gain remains achievable in the coming quarter. Many investors consider MSTR a viable arbitrage between the U.S. capital market and Bitcoin.
Bitcoin, The Fuel Powering MicroStrategy
MicroStrategy’s uncommon success in technology is largely attributed to Bitcoin. The Michael Saylor-led firm has leaned heavily on Bitcoin accumulation to secure its excess cash flow. In its Bitcoin acquisition plan, MicroStrategy buys at every opportunity, positioning it as one of the largest single corporate holders of the world’s leading digital asset.
Interestingly, MicroStrategy’s approach comes at a cost. The firm has expanded its convertible note offering to secure additional capital required for the purchase of Bitcoin. Notably, the aggressive purchase of Bitcoin comes from issuing these convertible senior notes. Most of these notes do not mature until June 2032.
Some have argued that if Bitcoin volatility triggers an unprecedented price plunge, MicroStrategy could be exposed. This is primarily because the stock value would drop, and raising the capital to offset the convertible notes might pose a challenge. Although the argument appears possible, the MicroStrategy Chairman remains unshaken in his bet on Bitcoin as an asset.
Saylor’s Vision: Building a Bitcoin-Backed Financial Empire
Michael Saylor’s leadership and unquenchable appetite for Bitcoin have played a notable role in MicroStrategy’s success. The Bitcoin advocate has remained bullish on Bitcoin, even projecting that it will become the currency of the future.
Saylor recently hinted at the next big move in his Bitcoin strategy, with this post on X addressing Microsoft CEO, Satya Nadella.
Furthermore, in a recent conversation with Bernstein analysts, Saylor disclosed that MicroStrategy aims to become the leading Bitcoin bank. He calls this the endgame for MicroStrategy. Saylor believes that the continued growth of Bitcoin will see his firm’s valuation reach $1 trillion, explaining the company’s massive Bitcoin accumulation.
He explained that the firm’s strategy would involve continuing to leverage low-cost debt to fund additional Bitcoin purchases. By his estimation, MicroStrategy hopes to maintain approximately 30% yearly growth.
Disclaimer
The information provided in this article is only for educational and informational purposes and should not be considered financial or investment advice. We are not licensed financial advisors. Always conduct your research and seek guidance from a certified financial professional before making any investment decisions.
