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MicroStrategy's $37B Bitcoin Bet Drives 465% Stock Surge, Outperforms Nvidia, Trades at 3.2x NAV

Nov 30, 2024, 04:36 PM

MicroStrategy has become one of the largest holders of Bitcoin, owning approximately 2% of the total Bitcoin supply, valued at $37 billion. The company has shifted its focus from being a B2B software firm to a major player in cryptocurrency under the leadership of its executive chairman, Michael Saylor. Its bold strategy has resulted in a 465% year-to-date increase in its stock price, though it recently experienced a 35% decline after peaking at $473. The company has financed its Bitcoin acquisitions, totaling $5.4 billion for 386,700 BTC, through $7 billion in low-interest bonds. Despite its market value reaching $89 billion, more than double its net asset value (trading at up to 3.2x NAV), MicroStrategy faces significant risks, including high debt exposure and potential forced Bitcoin sales during market downturns. The company plans to further expand its Bitcoin holdings, with intentions to purchase an additional $42 billion worth of the cryptocurrency. MicroStrategy's stock has outperformed Nvidia over the past five years, and its stock price has risen by 450% this year.