MicroStrategy: A Giant Among Giants
Unlike giants such as Apple, Nvidia, Amazon, and Meta, MicroStrategy has consistently hoarded Bitcoin over recent years, leaving these tech titans in its dust. In 2024, while MicroStrategy has enjoyed significant gains, Nvidia’s stock (NVDA) has struggled, offering a return of about 172%—still far below MicroStrategy’s performance.
The other major players in tech, including Microsoft (MSFT), Apple (AAPL), Amazon (AMZN), and Google (GOOGL), have also underperformed relative to MicroStrategy this year, posting modest low double-digit returns of 10.7%, 18%, 24%, and 16.7%, respectively.
Disconnect Between Valuation and Economic Value
Many analysts are vocal about their concerns regarding MicroStrategy’s strategy, claiming that its current market value is disconnected from its underlying economic fundamentals. Despite the company’s stock price soaring, Bitcoin has only seen a 8.8% increase over the past 30 days. This discrepancy raises critical questions: Why is MicroStrategy valued at approximately $43 billion when its Bitcoin holdings account for just over a third of that amount?
Supporters of the strategy argue that it is designed to maximize shareholder value in the long run. As MicroStrategy continues to acquire Bitcoin, shareholders are expected to benefit from holding more Bitcoin per share over time.
The Strategy Behind the Surge
MicroStrategy’s strategy of regularly purchasing Bitcoin, funded by free cash and raised through bond and stock issuances, has proven effective. As of the end of Q3 2024, the company holds approximately 252,220 Bitcoin, valued at about $15.8 billion. The former CEO and current chairman, Michael Saylor, has become a prominent advocate for Bitcoin and blockchain technology, often sharing insights on social media, podcasts, and economic channels about the strategic decisions made by the board.
Last Friday, MicroStrategy’s stock reached an all-time high, surging 16% in a single day, cementing its reputation as a formidable player in the financial landscape.
MicroStrategy’s impressive growth and strategic Bitcoin acquisition have set it apart from traditional tech giants, making it a standout example of how innovative approaches can lead to remarkable success. As the cryptocurrency market evolves, staying informed and making educated investment choices will be crucial.
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