Strategy, the largest corporate holder of Bitcoin, is now facing a sharp decline in its stock value, down 60% in the past six months. The company’s performance is closely tied to Bitcoin’s movements, with significant swings in stock price compared to the cryptocurrency itself. It reported $12 billion in unrealized gains on digital assets compared to $354 million in revenue for the year.

Despite a seemingly low price-to-earnings multiple, Strategy’s valuation remains high at over $50 billion, trading at over 100 times its revenue. The extreme volatility of its earnings due to Bitcoin holdings makes it a risky investment. With declining sales and speculative reasons to invest, the stock is considered highly speculative and best avoided by investors.

Investing in Strategy may amplify risk, resembling more of a meme coin than a stable stock. The company’s core business isn’t growing, relying heavily on the value of its digital assets for earnings. With unpredictable valuations and potential for further decline, investors may find it safer to steer clear of Strategy stock to avoid a roller-coaster ride.

The Motley Fool Stock Advisor team suggests looking into other stocks for potential returns, as Strategy isn’t among their top picks. With historical outperformance compared to the S&P 500, their recommendations have seen significant returns over time. Consider exploring their list for better investment opportunities.

Read more at Nasdaq: Down More Than 60% From Its High, Has Strategy Become a Cheap Stock?