Key Points
- MicroStrategy has purchased an additional 1,070 Bitcoin, boosting its total holdings to 447,470 BTC.
- The company’s stock (MSTR) has increased by 4.5% following the announcement.
MicroStrategy is continuing its trend of investing in Bitcoin. The company has recently added 1,070 BTC to its portfolio, valued at $101 million. This purchase has sparked optimism in the market, as the price of Bitcoin surged 3.6%, surpassing the significant $100K threshold.
This purchase was made around December 30, when the price of Bitcoin was at $94,000. Following the announcement, MicroStrategy’s stock price rose by 4.5%, surpassing the $350 mark.
MicroStrategy’s Bitcoin Acquisition Strategy
This is the first Bitcoin purchase made by MicroStrategy since it announced plans to use perpetual preferred stock to fund future acquisitions. This is also the ninth consecutive week of purchases by the company, indicating a strong commitment to its Bitcoin acquisition strategy.
As a result of its latest purchase, MicroStrategy now holds a total of 447,470 BTC, valued at $45.3 billion. This gives the company a 62% profit on its investment value, considering an average purchase price of $62,470.
Despite reporting $1 billion of impairment losses for the fourth quarter, the company’s balance sheet is expected to increase from $17.9 billion to just under $24 billion, as it transitions to fair-value accounting for its crypto holdings. For Q4 2024, MicroStrategy reported a BTC yield of 48% and a massive 74.3% for the financial year 2024.
MicroStrategy Stock Forecast
In 2024, MicroStrategy’s stock saw a significant increase of 330%, outperforming Bitcoin gains by a factor of three. Analysts at Benchmark have reiterated their “buy” rating for the stock, setting a price target of $650, which represents a 91% upside from its current price. This reflects the company’s growing Bitcoin holdings and the promising potential of its software business.
MicroStrategy announced plans to raise $2 billion in Q1 2025 through one or more offerings of perpetual preferred stock. This will take precedence over its Class A common stock and is part of the company’s broader strategy to secure $42 billion in capital by 2027 through stock sales and convertible debt offerings.
Michael Saylor, the executive chairman of MicroStrategy, stated that the company has already achieved two-thirds of its equity-raising target. The company needs ongoing capital infusion to continue its Bitcoin acquisition strategy, as its core software business has reported net losses in three of the past four quarters.
Mark Palmer, an analyst at Benchmark, highlighted that issuing perpetual preferred stock could attract a more conservative investor base, such as insurance companies, pension funds, and banks, who are seeking lower-volatility investments.
