When you think of companies that rival Amazon (AMZN) in size and scope, MicroStrategy (MSTR) isn’t the first name that comes to mind. Yet the software company turned Bitcoin powerhouse is about to join the ranks of tech giants like Amazon, Apple (AAPL), and Alphabet (GOOG) (GOOGL) in one surprising metric: authorized share count.
Under the leadership of Bitcoin (BTCUSD) evangelist Michael Saylor, MicroStrategy is seeking shareholder approval to increase its authorized Class A common shares to a staggering 10.3 billion from its current 330 million. If approved at the next shareholder meeting, this would put MicroStrategy in the same league as the Nasdaq-100’s ($IUXX) most prominent members in terms of potential shares outstanding. The bold move is part of MicroStrategy’s ambitious $42 billion capital-raising strategy, which should fuel its ongoing Bitcoin acquisition spree.
While such dramatic share count increases send investors running for the exits due to dilution concerns, MicroStrategy’s stock has been on a tear, surging over 2,500% since it began its Bitcoin strategy in 2020. The company has transformed itself from a modest enterprise software provider into a Wall Street favorite and a de facto Bitcoin proxy, with its holdings now exceeding $44 billion through consistent purchases.
Is MSTR Stock a Good Buy Right Now?
MicroStrategy’s Bitcoin strategy under Michael Saylor has emerged as one of Wall Streets’ most audacious corporate treasury moves. As the world’s largest corporate Bitcoin holder with 461,000 BTC, MicroStrategy is betting its existence on the success of the digital asset.
Saylor’s journey began modestly in August 2020 with a $250 million Bitcoin purchase using corporate cash. Since then, the strategy has evolved into an ambitious financing operation, utilizing convertible notes, senior secured notes, and now, a proposed massive share expansion from 330 million to 10.33 billion shares.
Valued at a market capitalization of $93 billion, MSTR reported sales of $467.2 million in the last 12 months. Today, the stock is priced at 205x trailing sales. However, we can also evaluate the company, given the value of its current BTC holdings. At the time of writing, MicroStrategy’s Bitcoin holdings are worth $48.56 billion. So, the tech stock is valued at 2x its BTC value.
As defined by MicroStrategy, the Bitcoin yield is a unique metric that measures how much additional Bitcoin each shareholder owns per share over time. It is a growth rate for Bitcoin ownership per share rather than a traditional dividend yield.
For example, MicroStrategy recently reported a Bitcoin yield of 1.69% after acquiring 11,000 BTC, bringing its total holdings to 461,000 BTC. This means that through its financing strategies — like selling stock and issuing convertible debt — the company increased each shareholder’s proportional Bitcoin ownership by 1.69%.
The metric has historically shown impressive results, with yields of 74.3% for the full year 2024 and 48% in Q4 2024.
Basically, the yield measures how effectively MicroStrategy is growing its Bitcoin holdings relative to its share count through various financing activities.
What Is the Target Price for MSTR Stock?
Each of the eight analysts covering MSTR stock recommends a “Strong Buy.” The tech stock’s average target is $561, indicating upside potential of over 50% from current levels.
MicroStrategy offers a unique way for high-risk investors to gain exposure to the cryptocurrency market. However, potential investors should remember that this investment represents a leveraged bet on Bitcoin’s continued success.
