- Strategy (MSTR) , formerly MicroStrategy, has rebranded to emphasize its Bitcoin (BTC) strategy, accumulating $30.4 billion in Bitcoin despite reporting financial losses for four consecutive quarters.
- The company’s stock has surged more than 406% year-over-year, pushing its market cap to $82.31 billion, which is significantly higher than its Bitcoin’s net asset value, raising questions about valuation discrepancies.
- Michael Saylor‘s aggressive plan to invest $42 billion in Bitcoin over three years could yield high returns if Bitcoin grows, but it also introduces substantial risks including liquidity and valuation issues, as criticized by financial analysts.
MicroStrategy, now rebranded as Strategy (MSTR) with a logo incorporating the Bitcoin (BTC) symbol, has seen its market value soar to an unprecedented $82.3 billion despite reporting financial losses for the last four quarters. The company’s aggressive Bitcoin investment strategy, highlighted by the acquisition of 218,887 Bitcoins for $20.5 billion in Q4 2024, has driven its stock up by over 406% on a year-over-year basis. Despite posting a $671 million net loss ($3.03 per share) in the latest quarter — partly due to an impairment charge on its Bitcoin holdings — and a 3.1% revenue decline from last year, the loss ultimately reduced the company’s tax burden. This strategy has led to the company owning about 2% of all Bitcoin in circulation, with its current holdings valued at around $30.4 billion. Yet, this aggressive approach, as noted in a recent article by Fortune, introduces significant risks, including potential liquidity issues if Bitcoin’s price drops, as noted by financial experts who question the disconnect between the company’s market cap and its Bitcoin’s net asset value (NAV).
Michael Saylor, Strategy’s executive chairman, has been the mastermind behind this pivot to Bitcoin, framing the company as a “Bitcoin treasury company” with plans to buy $42 billion worth of the cryptocurrency over the next three years through its “21/21 plan.” Despite the company’s core business in business intelligence and cloud computing showing negative EBITDA since Q2 2023, Saylor’s focus remains on Bitcoin, arguing that its growth could yield over $10 billion in annual gains for Strategy if Bitcoin appreciates over 21% yearly. However, this strategy has its skeptics. Finance professor Bryan Routledge of Carnegie Mellon University told Fortune that the valuation gap between Strategy’s market cap and its Bitcoin holdings appears irrational, emphasizing that investors face risks beyond Bitcoin’s volatility.
The rebranding and Bitcoin focus mark a significant departure from Strategy’s origins as a data analytics firm founded by Saylor in 1989, which rode the tech boom of the late ’90s to public success but also faced significant setbacks, including a major SEC settlement for revenue overstatement. Saylor’s history of bold predictions and investments, from mobile computing to now Bitcoin, showcases his willingness to bet big on emerging technologies, though his current Bitcoin strategy could either lead to further financial gains or expose the company to substantial risks if market conditions change unfavorably.
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