MicroStrategy (NASDAQ:MSTR), valued at $25 billion by market cap, specializes in enterprise analytics and mobility software solutions. Despite its software-centric core, the company has invested significantly in Bitcoin (BTCUSD) over the past four years under the leadership of Chairman Michael Saylor.
Saylor began MicroStrategy's Bitcoin investment journey by purchasing $250 million worth of Bitcoin in 2020, citing its potential as a store of value with the prospect of long-term capital appreciation. MicroStrategy currently holds 214,246 BTC, worth more than $14 billion, making its stock price closely tied to Bitcoin's performance.
MicroStrategy funds BTC through debt and equity
MicroStrategy's core software business has seen modest revenue growth, but operating income remains relatively low. To fund its significant Bitcoin investment, the company increased its debt, increasing its net debt from $531 million in 2020 to $2.1 billion in 2023. Additionally, MicroStrategy has been issuing stock, nearly doubling the number of shares outstanding since August 2020, diluting shareholder wealth.
Will BTC price go higher?
Bitcoin has witnessed an incredible rally, surging around 300% since the beginning of 2023. The recent decline from its all-time high of $73,000 raises questions about its future trajectory. Factors such as the launch of spot Bitcoin ETFs and the upcoming “halving” event, which have historically driven price surges, contribute to market sentiment.
What is your target price for MSTR stock?
Analysts unanimously rate MSTR stock a “Strong Buy,” with an average price target of $1,733.35, suggesting a 17.2% upside potential. Despite the expected volatility, investing in MSTR could be advantageous for those who expect BTC price rises over the next 18 months.
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