Virginia-based MicroStrategy (MSTR) is no ordinary software firm. While its roots lie in enterprise analytics, it has rewritten its own playbook, transforming into the largest corporate holder of Bitcoin (BTCUSD).
Now, MicroStrategy has doubled down again. This past week, the company scooped up another 10,107 BTC for approximately $1.1 billion, bringing its total stash to a staggering 471,107 coins. To bankroll these relentless purchases, the firm has relied on equity sales and debt issuance.
MicroStrategy’s Bitcoin accumulation, backed by fresh capital and surging retail hype, has driven MSTR up by triple digits in a year. Yet, its fate remains shackled to Bitcoin’s volatility. Monday’s shake-up - triggered by DeepSeek and fading rate-cut hopes - rattled crypto markets, knocking MSTR stock down.
About MicroStrategy Stock
Founded in 1989, MicroStrategy (MSTR), led by chairman Michael Saylor, evolved from a software pioneer into a Bitcoin powerhouse. The company’s MicroStrategy ONE platform drives insights across industries like finance, healthcare, and government.
Now dubbed the first Bitcoin Treasury Company, MicroStrategy has made digital assets the core of its strategy. It offers investors a unique opportunity to tap into Bitcoin’s potential through its visionary approach. Its market capitalization currently stands at $81.8 billion.
MicroStrategy’s stock has been on a wild ride, skyrocketing over 2,100% since 2020. Despite concerns over share dilution from a massive stock increase, MSTR has defied the odds, rising 563% over the past 52 weeks. This surge comes on the back of strategic Bitcoin acquisitions.
MicroStrategy’s meteoric rise has sent MSTR’s valuation through the roof as it trades at an eye-popping 141.57 times sales. This premium, far beyond its historical norm, speaks volumes about investors’ confidence in its Bitcoin-driven strategy.
MicroStrategy’s Q3 Performance
MicroStrategy’s Q3 earnings on Oct. 30 told a story of growth, struggle, and ambitious plans. While revenue slipped 10.3% year-over-year to $116.1 million and net losses deepened to $1.72 per share, the company showed resilience in its subscription services, which climbed 32.5% to $27.8 million. Subscription billings saw an even bigger jump, up 93% to $32.4 million, underscoring the growing demand for its cloud services and the success of migrating customers to this model.
Despite the hit to product licenses and support revenues, the long-term outlook looks strong, as subscription growth should drive deeper customer engagement and more sustainable revenue. This aligns well with MicroStrategy’s Bitcoin strategy, where its total BTC holdings are currently valued at $49.4 billion.
However, the company’s operating expenses jumped a staggering 300% to $514.3 million, mainly due to digital asset impairment losses, leaving just $46.3 million in cash - putting pressure on its profitability.
The company is all set to unveil its fiscal Q4 earnings report next week on Wednesday, Feb. 5, after the closing bell.
MSTR’s Bitcoin Expansion
MicroStrategy continues its unyielding Bitcoin pursuit, purchasing another 10,107 BTC, marking its 12th consecutive week of such acquisitions. To fund these purchases, MicroStrategy leveraged equity sales and debt issuance, selling 2.76 million shares.
But that’s not all. The company also got shareholder approval to hike its Class A common shares from 330 million to 10.3 billion, plus a jump in preferred stock from 5 million to 1 billion.
The company is on a mission to raise $42 billion by 2027, mostly through equity and convertible note offerings to fuel its Bitcoin ambitions. Less than three months into the plan, it is already down to $5.42 billion in equity offerings.
It also launched a Series A Perpetual Strike Preferred Stock offering of 2.5 million shares. If all goes to plan, MicroStrategy could have more shares than all but four of the Nasdaq-100 Index’s ($IUXX) biggest players - Nvidia (NVDA), Apple (AAPL), Alphabet (GOOGL) (GOOG) and Amazon (AMZN).
What Do Analysts Expect for MicroStrategy Stock?
Benchmark analysts remain bullish on MSTR, reaffirming their “Buy” rating on Jan. 14 and their $650 price target, signaling upside of 90.5%. Their optimism was strengthened by Michael Saylor’s insights at the ICR Conference in Orlando, where he unveiled plans to raise $2 billion through perpetual preferred stock in early 2025. Unlike traditional debt, this instrument carries no maturity date, fortifying MicroStrategy’s capital structure while amplifying Bitcoin exposure.
Overall, Wall Street’s optimism on MSTR is clear, with all eight analysts covering the stock unanimously rating it a "Strong Buy." With an average price target of $561, there is 64.4% upside potential in play, reflecting the growing confidence and bullish sentiment driving MSTR forward.
MicroStrategy’s Bitcoin strategy is reshaping its identity, with relentless acquisitions and a massive capital raise boosting its market presence. As Saylor continues to stack Bitcoin, the company is poised for a unique growth path, especially with a more crypto-friendly environment under President Donald Trump. However, the ride is not without risks, as Bitcoin’s inherent volatility adds an unpredictable twist. For high-risk investors seeking exposure to crypto, MicroStrategy offers a tempting yet risky bet on Bitcoin’s future.
