MicroStrategy Shares Trading at a Discount
If you’re considering investing in Bitcoin, you might want to think about MicroStrategy instead. According to Blockstream CEO Adam Back, shares of MicroStrategy are trading at a significant discount compared to their BTC holdings.
MSTR’s Bitcoin Holdings
MicroStrategy, owned by Bitcoin maximalist Michael Saylor, is one of the largest Bitcoin investors globally. The company currently holds 189,150 BTC valued at $8.09 billion.
The Value of MicroStrategy’s Software Business
Based on the company’s market cap before converting its balance sheet to Bitcoin, Back estimates that the value of MicroStrategy’s software business is around $2 billion.
Fair Market Value of MSTR
Back believes that the fair market value of MicroStrategy should be around $10.5 billion to $11.5 billion. He suggests that MSTR’s price should be at least $625-$685 per share.
MSTR Outperforms BTC
In Q4 2023, MSTR rallied from $329 to $685, surpassing Bitcoin’s gains during the same period. Both assets experienced a dump after the launch of Bitcoin spot ETFs on U.S. exchanges.
MicroStrategy as a Proxy for an ETF
MicroStrategy has been used by investors as a proxy for an ETF due to its strategy of issuing new shares to buy BTC. However, with the launch of actual ETFs, MSTR suffered a significant slide to $482 by January 16.
MSTR Still at a Premium?
Critics argue that even with the drop, MSTR may still be trading at a premium when considering the company’s $2 billion debt. However, Back believes this debt will inflate away over time.
MSTR’s Performance Compared to BTC
According to Bitcoin ETF analyst Fred Krueger, MSTR will slightly underperform BTC if BTC rallies to $200,000 per coin. Nevertheless, MicroStrategy is up 36.11% ($2.14 billion) on its Bitcoin holdings.
Hot Take: MicroStrategy Shares – A Hidden Gem?
MicroStrategy shares may present an attractive opportunity for investors. With its significant Bitcoin holdings and a software business valued at around $2 billion, MSTR seems undervalued compared to its true potential. While there are concerns about the company’s debt, it is long-dated and may not impact its performance in the long run. Despite the recent slide in price, MSTR has outperformed Bitcoin in the past and could continue to do so in the future. If you’re looking for an alternative investment in the crypto space, MicroStrategy shares might be worth considering.
By
By
By
By
By