MicroStrategy shifted focus to Bitcoin, amassing 252,220 bitcoins, facing risks tied to cryptocurrency value

From Nasdaq

January 27, 2025 8:05 pm:

MicroStrategy (NASDAQ: MSTR) has shifted focus from analytics to Bitcoin, amassing 252,220 bitcoins at a cost of $9.9 billion, now valued at $26 billion. Despite $4.2 billion in debt and declining revenue, its market cap is $91 billion. The stock’s value is tied to Bitcoin, but potential risks and upside potential are debated.

MicroStrategy acts as a leveraged Bitcoin ETF, leading to a market cap of $91 billion, despite $26 billion in Bitcoin holdings. The company’s revenue fell 10% to $116.1 million, with $900,000 in profit. Debt of $4.2 billion and increased shares pose risks. As a Bitcoin proxy, MicroStrategy’s value is debated.

Investing in MicroStrategy is tied to Bitcoin’s price, with its premium stretched at three times the crypto’s value. The stock faces risks if Bitcoin tumbles. While MicroStrategy’s approach validates if Bitcoin rises, the stock may not offer compelling reasons to buy over Bitcoin. Analysts don’t recommend it among top 10 stocks.

Before investing in MicroStrategy, consider the risks and potential returns. The stock’s tie to Bitcoin and premium valuation raise concerns. The Motley Fool Stock Advisor team suggests other top stocks for better returns. MicroStrategy’s approach may not offer the same potential as direct Bitcoin investment.

Read more at Nasdaq: Is MicroStrategy Stock a Buy?