MicroStrategy’s Bitcoin Holding Strategy Helps Boost Company Share Price
In Brief
Michael Saylor’s MicroStrategy sees gains as Bitcoin approaches $31,000, having bought at an average of $29,582.
MicroStrategy’s pre-market shares soared by over 8% on the back of the company’s significant Bitcoin holdings. The firm, by September 24, 2023, had amassed a notable 158,245 Bitcoin at an average cost of $29,582 per coin.
The business acumen of Michael Saylor, co-founder of MicroStrategy Inc., is once again under the spotlight. His multibillion-dollar Bitcoin gamble is proving fruitful as the prominent cryptocurrency recently touched nearly $31,000, marking its pinnacle since July.
MicroStrategy’s Shifts and Decisions
This surge is especially significant given the firm’s disclosure last month that their average Bitcoin purchase price stood at $29,582, translating to a whopping $4.68 billion in holdings.
It’s worth noting that Saylor embarked on his Bitcoin acquisition journey in 2020. His aggressive purchasing strategy this year coincides with Bitcoin’s rebound from a tumultuous period marked by increasing rates, notable crypto collapses, and bankruptcies.
After enduring losses for eight successive quarters, MicroStrategy reported profits in both Q1 and Q2 of this year, with third-quarter results eagerly anticipated on November 1.
The Bitcoin Effect
MicroStrategy’s shares have witnessed a meteoric rise of approximately 160% this year, while Bitcoin’s value has increased by around 85%. This performance is a stark contrast to 2022, when the company’s stock plunged by 74% and Bitcoin ended the year at a diminished value of around $16,500, especially considering its record peak of nearly $69,000 in late 2021.
FRNT Financial’s CEO, Stephane Ouellette, commented on the symbiotic relationship between MicroStrategy’s treasury and Bitcoin. He highlighted the potential for the company to experience an upswing in their stock or even report an enhanced quarterly performance due to the cryptocurrency’s gains. Ouellette further added that as MicroStrategy continues to diversify its offerings within the crypto arena, it may see a surge in demand for its unique services.
A notable shift in the company’s leadership dynamics was when Saylor relinquished his CEO role last year to concentrate on the Bitcoin facet of MicroStrategy’s dual-focused strategy.
BREAKING: @MicroStrategy'S $BTC PORTFOLIO VALUATION SURPASSES $5 BILLION – IS NOW ~$570M IN PROFIT pic.twitter.com/lx8UgpL74I
— DEGEN NEWS 🗞️ (@DegenerateNews) October 23, 2023
Earlier in August, MicroStrategy declared its potential intentions to garner up to $750 million through share sales. The proposed utilization of these funds includes Bitcoin acquisitions, operational capital, and debt buybacks.
The latest upsurge in Bitcoin’s value can be attributed partly to the growing enthusiasm surrounding the prospective approval of the inaugural exchange-traded fund (ETF) directly investing in the cryptocurrency. Many advocates assert that a Bitcoin ETF could spike demand for digital currencies, which could in turn elevate the stock prices of crypto-centric corporations like MicroStrategy.
TD Cowen’s Lance Vitanza, a seasoned cross-capital structure analyst, weighed in on the discussion. He likened MicroStrategy to a “fee-less Bitcoin ETF with an associated real cash-flowing business.” He further pointed out the complexities involved in purchasing or trading Bitcoin and lauded MicroStrategy for providing substantial downside protection through its strategic, leveraged balance sheet positioning.
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About The Author
Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
