November 28, 2023

MicroStrategy Stock Achieves Nearly Two-Year Peak on Strong Bitcoin Returns

MicroStrategy, the business intelligence firm renowned for its bullish stance on bitcoin, marked a milestone as its stock surged to levels not seen since December 2021.

On Black Friday, MicroStrategy (NASDAQ:MSTR) saw its stock surpass the $500 mark, reaching a pinnacle not witnessed since December 2021. This surge contributed to the firm's market capitalization, closing at $7.33 billion, according to data from the New York-based tech-heavy exchange.

MicroStrategy's steadfast commitment to holding bitcoin has proven lucrative, gaining significant traction among investors. Despite starting the year with a quarterly loss, the company witnessed a doubling of its stock price within a month. As one of the foremost institutional holders of bitcoin, MicroStrategy, led by founder and chairman Michael Saylor, initiated bitcoin acquisitions in August 2020 as a hedge against inflation.

In an interview with CNBC, Saylor expressed optimism for the coming months:

"That’s why all of us are fairly bullish over the next 12 months. Demand’s going to increase, supply’s going to contract, and this is fairly unprecedented in the history of Wall Street."

The positive momentum continued into April when MicroStrategy's bitcoin holdings turned profitable, coinciding with bitcoin's price surpassing $30,000. The company further bolstered its position by acquiring an additional 1,045 bitcoin, bringing its total holdings to 140,000 bitcoin. Notably, this increased the average purchase price of the digital asset to $29,803 per coin, effectively leveraging over $4 billion in bitcoin.

Despite a $24 million bitcoin impairment charge in its second-quarter earnings report, MicroStrategy returned to profitability as a company. It continued to build its bitcoin portfolio, amassing a total of 152,800 coins valued at approximately $4.4 billion.

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While the latest quarterly report, released in early November, indicated a net loss of $143.4 million — significantly higher than the $27 million loss reported in the same period last year — MicroStrategy maintained its commitment to bitcoin. During this period, the company acquired an additional 6,067 bitcoin for $167 million, solidifying its position as a major player with approximately 0.75% of bitcoin's total circulating supply.

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