MicroStrategy: The Crypto Stock That’s Outperforming Bitcoin

As the cryptocurrency market continues to soar, investors are looking for ways to capitalize on the trend. One stock that has been making waves is MicroStrategy (MSTR), which has more than doubled in value this year. But what’s behind this remarkable performance, and is it a good investment opportunity?

MicroStrategy’s Focus on Bitcoin

MicroStrategy has made acquiring Bitcoins a key part of its business focus. The company has been updating investors on its Bitcoin holdings, and recently announced plans to raise $500 million through an offering of senior convertible notes to acquire even more Bitcoins. This focus on crypto has made MicroStrategy an attractive option for crypto fans, as the business will benefit from Bitcoin’s rising price.

“MicroStrategy has been a scorching-hot buy this year as it has more than doubled in value, largely a result of Bitcoin.” - Source

The Risks and Rewards of Investing in MicroStrategy

While MicroStrategy’s focus on acquiring Bitcoins has made it an attractive option for crypto investors, it’s essential to consider the risks involved. The company’s fundamentals aren’t great, with sales declining by more than 5% year over year in the first three months of 2024. Additionally, MicroStrategy has incurred significant losses due to digital-asset impairment.

MicroStrategy’s stock has more than doubled in value this year.

However, for investors who are bullish on Bitcoin, MicroStrategy might be a more appealing option than owning Bitcoin directly. With a smaller valuation than Bitcoin, it may be a good way to gain exposure to crypto.

Is MicroStrategy a Good Investment?

MicroStrategy’s stock trades at nearly 4,000 times its trailing earnings, more than 50 times revenue, and over 11 times its book value. It’s an extremely expensive stock. Based on its fundamentals, there isn’t much of a reason to invest in MicroStrategy.

However, for crypto enthusiasts, MicroStrategy’s focus on acquiring Bitcoins might make it a more appealing option. But if you’re not bullish on Bitcoin, you may be better off avoiding MicroStrategy, as its future returns will largely depend on how high the digital currency goes.

Bitcoin’s price has been soaring this year.

In conclusion, MicroStrategy’s remarkable performance this year is largely due to its focus on acquiring Bitcoins. While it may be an attractive option for crypto fans, investors should carefully consider the risks involved and the company’s fundamentals before making a decision.