Have you noticed the recent upswing in MicroStrategy’s stock? Closing comfortably above $500 on Black Friday, the enterprise business firm’s stock is witnessing levels it hasn’t seen since December 2021. So, what’s driving this surge? Let’s dive in and explore.
The Winning Strategy
MicroStrategy (NASDAQ:MSTR) has had a long-term strategy of holding Bitcoin, the top cryptocurrency, which has proven to be a successful one. Despite starting the year with a quarterly loss, the company saw its stock price double within a month. The company’s founder and chairman, Michael Saylor, began purchasing Bitcoin in August 2020 as a hedge against inflation. As he explained to CNBC, “Demand’s going to increase, supply’s going to contract, and this is fairly unprecedented in the history of Wall Street.”
Green Numbers and Continued Investments
By April, MicroStrategy’s Bitcoin holdings turned profitable. The price of Bitcoin rose above $30,000, and with the acquisition of 1,045 additional Bitcoin, the company increased its total holdings to 140,000 Bitcoin. This purchase brought the average price of their digital asset investment down to $29,803 per coin. Despite a $24 million Bitcoin impairment charge in its second-quarter earnings report, MicroStrategy returned to profitability. The company continued its Bitcoin buying spree, amassing 152,800 coins valued at about $4.4 billion.
Not All Smooth Sailing
However, it hasn’t been all smooth sailing for MicroStrategy. In its most recent quarterly report issued in early November, the company posted a net loss of $143.4 million. This was a significant increase from the $27 million loss reported in the same period last year. Despite this, MicroStrategy continued to buy Bitcoin, adding another 6,067 Bitcoin for $167 million. The company now holds approximately 0.75% of Bitcoin’s total circulating supply.
Interestingly, the performance of companies with Bitcoin exposure, like MicroStrategy, has outpaced the cryptocurrency itself, which has already seen an 87% increase this year. This fact underscores the potential value of strategic investments in digital assets. For those interested in tracking the performance of companies like MicroStrategy, or the broader crypto market, platforms like cryptoview.io offer an invaluable resource.
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