MicroStrategy known as Bitcoin hoarder, strong correlation with Bitcoin price, recent net loss, borrow-and-hoard strategy

From Nasdaq

August 15, 2024 6:00 am:

MicroStrategy (NASDAQ: MSTR) is primarily known as a Bitcoin hoarder, with more than 1% of all Bitcoins to ever be mined already in their possession. Their focus on aggressively accumulating Bitcoin is evident, despite conducting a recent 10-for-1 stock split.

The correlation between MicroStrategy stock and Bitcoin price is strong, with the former doubling year to date. However, their financial performance doesn’t always justify this growth, as seen in their recent net loss of $102.6 million due to a $180.1 million impairment charge on Bitcoin holdings.

Executive Chairman Michael Saylor remains bullish on Bitcoin, predicting significant price increases in the future. MicroStrategy’s strategy of borrowing to buy Bitcoin raises concern for some investors, as the company issued $800 million in senior notes to fund their Bitcoin acquisitions.

Investors considering MicroStrategy stock should weigh the risks and rewards of the borrow-and-hoard strategy. While it may not be too late to buy MicroStrategy shares, those with a preference for fiscal prudence over speculative investments may choose to stay cautious or take profits.

The Motley Fool Stock Advisor team did not include MicroStrategy in their 10 best stocks list for potential monster returns. Investors are encouraged to research and analyze their investment decisions carefully before buying stocks like MicroStrategy.

Read more at Nasdaq: Is It Too Late to Buy MicroStrategy Stock Now?