Stock Analysis & Ideas

MicroStrategy (NASDAQ:MSTR) Continues Adding Bitcoin to its Reserves

Story Highlights

MicroStrategy has purchased additional bitcoin during the latest dip in the cryptocurrency’s price. The company’s bitcoin reserves are the largest among corporate buyers.

Michael Saylor’s MicroStrategy (MSTR) keeps accumulating Bitcoin (BTC-USD) to its reserves, taking advantage of every dip in the crypto’s price. MicroStrategy provides business intelligence, mobile software, and cloud-based services.

Meanwhile, one of MSTR’s main corporate strategies is to invest in bitcoin and hold it for the long term. Following this strategy, MSTR has become one of the world’s largest publicly traded corporate owners of bitcoin.

However, owing to the huge volatility and slump in bitcoin prices this year, MSTR stock has taken a beating. Year-to-date, the stock is down 65.5%. On the other hand, BTC’s value has slumped 55.6% in the past six months and is trading approximately 73% lower than its all-time high of $68,978.64.

MSTR’s Latest Binge on Bitcoin

In a regulatory filing dated September 20, MicroStrategy announced its latest purchase of bitcoin. Between August 2, 2022, and September 19, 2022, MSTR bought around 301 bitcoins for roughly $6.0 million at an average price of $19,851 per piece. The purchase was made using the excess cash available at its disposal.

Notably, as of September 19, MSTR held approximately 130,000 bitcoins, aggregating a whopping $3.98 billion. These purchases were made at an average purchase price of $30,639 per piece (including fees and expenses).

Furthermore, in a prospectus filing dated September 9, MicroStrategy also announced that it may issue additional shares of its Class A common stock for up to $500 million to purchase additional bitcoins whenever deemed fit.

Is MSTR a Buy or Sell?

Owing to MicroStrategy’s huge exposure to bitcoin, analysts are split on its future stock trajectory. On TipRanks, MSTR stock has a Moderate Buy consensus rating based on three Buys versus one Sell. The average MicroStrategy price forecast of $500.67 implies a massive 160.3% upside potential to current levels.

Ending Thoughts

MicroStrategy’s co-founder, Saylor, has a strong conviction in bitcoin’s future potential. After posting a loss in the second quarter of Fiscal 2022 results, Saylor stepped down from his CEO role to focus his full attention on bitcoin management strategy. Should Saylor’s conviction hold, MSTR should benefit heavily from its bitcoin reserves in the long run.


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