MicroStrategy (MSTR) was a Wall Street star in 2024, with shares rising 334% over the past 52 weeks and more than 2,000% over the past two years. Although the Virginia-based company has its roots in software, it has attracted far more investor attention for its digital currency strategy. MicroStrategy, under the leadership of founder Michael Saylor, has been rapidly buying up Bitcoin (BTCUSD) and is now the largest corporate holder of BTC. After its latest purchase, the company now holds 446,400 BTC on its balance sheet.
This has been a popular strategy with investors because it has allowed MicroStrategy to leverage the rally in BTC prices in 2024, with the leading cryptocurrency hitting a new all-time high above $108,000. Wall Street has regained confidence in Bitcoin ahead of Inauguration Day as President-elect Donald Trump has promised more favorable policies such as a strategic reserve and appointing a crypto friend to chair the SEC.
But not everyone is so keen on MicroStrategy’s approach. Martin Shkreli, also known by many as “pharma bro,” took aim at Saylor and MSTR on X, formerly known as Twitter. So what did Shkreli have to say about MSTR stock? And can the company keep up its roaring returns?
Martin Shkreli Warns MicroStrategy
After MicroStrategy stock briefly fell below $300, Shkreli spoke out on X. He wrote “Uh $MSTR < $300. We will liquidate you and take BTC to $250,000 without Saylor—poetic justice?” This follows his past criticisms of Saylor and his BTC strategy, including saying that it was a “big bubble.” Shkreli also announced that he has a short position in MSTR stock.
Shkreli, who was convicted of securities fraud in 2017 and gained notoriety for purchasing antiparasitic drug Daraprim and raising its price to insurance companies from $13.50 to $750 per pill, is no stranger to the crypto world. He previously backed Martin Shkreli Inu, a meme token that was wiped out in 2022 after an alleged hack. At the same time, he was running a Web 3.0 project called Druglike to support early stage drug discovery.
More recently, Shkreli was behind a Donald Trump token that he claimed to be working on with the president-elect’s son, Barron Trump. A large token sale in August 2024 caused the price of this token to also plunge.
MicroStrategy Focuses on BTC as Revenue Falls
On Oct. 30, MicroStrategy reported results for the third quarter of 2024. The company focused on its current Bitcoin holdings and its 21/21 plan - a strategy to issue $21 billion in debt and $21 billion in equity to fund further BTC purchases.
However, the company also reported that its revenue fell 10.3% year-over-year to $116.1 million. This comes despite the fact that its software subscription revenue was up 32.5% year-over-year to $27.8 million. Reading between the lines, MicroStrategy reported a drop in revenue due to impairment charges it has been forced to take on its BTC holdings. For the third quarter, those amounted to $412.1 million, up dramatically from $33.6 million in the year-ago period.
Its net loss also widened dramatically, from $143.4 million in the third quarter of 2023 to $340.2 million in the third quarter of 2024.
The company is primarily trading in line with Bitcoin prices, as opposed to its own fundamentals. Its forward price-sales ratio of 133.3x is 3,927% above the industry average.
Shkreli’s comments highlight a real risk that MSTR investors face. If Bitcoin stalls out, MicroStrategy shares could fall further and faster than the crypto itself.
Potential MSTR Drivers in 2025
How crypto fares under a Trump presidency in 2025 will likely play a big role in the performance of MicroStrategy stock this year. Investors remain excited for more details on a proposed strategic reserve and pro-crypto regulation. Digital currency experts anticipate growing mainstream support for decentralized finance and crypto staking under Trump. If BTC prices continue to rise alongside this enthusiasm, investors can reasonably expect MSTR shares to do the same.
Some bulls also point to plans by the company to focus more on its cloud software offerings. Barchart contributor Amit Singh highlights that growth in its subscription revenue in the third quarter is proof that its cloud platform is seeing increasing demand.
What Analysts Think About MicroStrategy Stock
Despite its rapid ascent in 2024, analysts are still bullish on MicroStrategy Stock. They have a consensus “Strong Buy” rating and their 12-month price target of $530.75 implies 77% upside potential from current prices. Its Street-high price target of $650 implies MSTR could double from here.
