Are any of you familiar with MicroStraegy (MSTR)? It’s an enterprise software company whose revenue has been declining in recent years. In December the Company made a $1 billion Bitcoin investment, and the stock soared.
The Company is using Bitcoin as its primary treasury reserve asset and funded a large portion of its Bitcoin investment by issuing convertible bonds.
I don’t have a long or short position in the stock, nor do I plan to; I just think it’s interesting.
some nurse told me he bought it at 500. it doubled within a month. anyhow i think its crazy. so its currently valued at about 10b, for most of 2020 it was valued between 1 to 1.5b. compared to its bitcoin holdings which are at about 3.2b. he spent about 1.5b. anyways crazyyyy
How do you value these companies that invest far outside their business model? Once read an analyst’s comment that said that Apple should be viewed as a quasi-hedge fund because their massive retained earnings are invested in very volatile assets.
last i checked it was like 200b that was invested in something conservative that generated 2%. at the time i think the 10 year treasury was roughly the same.
That’s my question as well. When you factor in the convertible debt and potential share dilution in the future it complicates the valuation process even more, but I don’t think a lot of the recent buyers are doing that level of analysis.
The CEO owns over 70% of the voting shares, so he has a lot of leeway when it comes to these types of decisions.
MSTR filed its 10k today. Nerdy’s are pretty close to the most recently reported numbers, which implies that the software business is being valued at around $6.5 billion. It was valued at $1-1.5 billion about five months ago.