As a seasoned crypto investor with over a decade of experience, I find myself intrigued by MicroStrategy’s (MSTR) aggressive Bitcoin buying strategy under Michael Saylor’s leadership. Having witnessed the volatility and potential of this nascent market firsthand, I can appreciate the bold move to invest heavily in Bitcoin despite the recent market concerns about MSTR’s “leveraged” play.
However, my personal investment philosophy has always been centered around a balanced and diversified approach to investing. While I admire MicroStrategy’s commitment to Bitcoin as a strategic reserve asset, I am cautious about the company’s high levels of debt and proposed increase in authorized shares. The potential for dilution is a significant concern, and I would want to closely monitor the situation before making any investment decisions.
In my experience, investing in cryptocurrencies requires a keen eye for spotting opportunities while being mindful of risks, especially when it comes to highly leveraged plays like MSTR’s Bitcoin buying spree. As always, it is essential to do thorough research and make informed decisions based on your risk tolerance and investment goals.
On a lighter note, I can’t help but chuckle at the prediction that MicroStrategy could become a top 5 company by market cap within five years before eventually going bankrupt. Only time will tell if this turns out to be true or just another crypto-related joke! As an investor, I always keep a sense of humor handy in this unpredictable market.
The stocks of MicroStrategy, owned by Michael Saylor, experienced a drop of more than 8% following their recent purchase of $209 million worth of Bitcoin. Some analysts are now expressing apprehensions regarding the company’s “highly leveraged” strategy with Bitcoin.
30 pm UTC. By the end of that hour, its share price had dropped by approximately 5.3%, from $318.89 to $302.09.
Although there was some improvement during the trading session, it closed the day at $302.96 as per Google Finance records. However, it subsequently dipped by 3.19% in post-market hours, lowering the price to $293.59.
As per the reported documents, MicroStrategy financed the purchase using proceeds from the sale of approximately 592,987 shares within that particular week.
In the past eight weeks running up to now, the business intelligence company, MicroStrategy, has consistently added Bitcoin (BTC) to its portfolio each week. Starting from October 31, it has made weekly purchases of Bitcoin, accumulating a total of 194,180 BTC in its holdings.
MicroStrategy’s “hyperbitcoinization”
In a December 30th post, The Kobeissi Letter stated that the financial markets are expressing concern over MicroStrategy’s plan to boost its authorized share capital by 10 billion.
Kobessi stated that Mastercard Strategic (MSTR) increased its financial obligations significantly by using both convertible bonds and loan disbursements. To maintain its Bitcoin acquisition plan, the company may need to take on additional debt or stock issuances. Furthermore, it was noted:
“Total share could rise from 330 million to 10.33 BILLION if it is approved. The problem is, it has left the company in a “lose-lose” situation for now.”
While MSTR price has plunged 20.18% over the past 30 days, it is up 342.15% since Jan. 1.
Reflecting on Felix Hartmann’s December 30th post as the analyst, he foresees a potential collapse of MicroStrategy’s stock price. However, he cautions that most short-sellers may misjudge the timing, leading to their positions against Bitcoin (BTC) and MicroStrategy (MSTR) being unsustainable and ultimately failing.
Based on my extensive experience and analysis of market trends, I believe that within the next five years, MSTR may rise to become one of the top 5 companies by market capitalization. However, it is important to remember that such a prediction comes with inherent risks, as history has shown us that even the most promising companies can eventually face bankruptcy. As someone who has witnessed both the heights of success and the depths of failure in the corporate world, I can attest to the unpredictability of market forces. Therefore, while it is tempting to be optimistic about MSTR’s future prospects, it is crucial to approach this prediction with caution and a keen understanding of the potential risks involved. We are indeed at an early stage, but let us not forget that the journey ahead may hold surprises and challenges that could ultimately determine the fate of this company.
“Counterargument is that in a raging bull he’ll be able to lever up materially more, and repaying $1-4bn of 2027-9 maturities will be peanuts when he sits one $300bn worth of BTC.”
Market research leader Joe Burnett, who is no longer tethered to any specific company, referred to MicroStrategy’s current approach as an extreme adoption of Bitcoin, which he termed “extreme bitcoinization.
Burnett stated that since the company is trading above market value, it has the opportunity to expand its holdings of Bitcoin per share by utilizing financial leverage.
By trading at a price higher than their net asset value (NAV), they can issue shares beyond the actual Bitcoin ownership, purchase additional Bitcoins, and lower their debt ratio. This continuous process results in an increased value of Bitcoin per share.” – Burnett explained.
On December 23rd, MicroStrategy became part of the Nasdaq-100 index, which signifies that it now ranks among the top 100 companies listed on the Nasdaq stock exchange based on their total market value.
On December 13th, as stated by Nasdaq, MicroStrategy was among the three companies that were included in the index alongside Palantir Technologies Inc., represented by PLTR, and Axon Enterprise, Inc., symbolized by AXON.
This piece serves primarily as a source of general knowledge and shouldn’t be construed as legal or financial guidance. The perspectives, beliefs, and viewpoints expressed are solely those of the writer and may not align with or mirror the opinions held by CryptoMoon.
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2024-12-31 06:46