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MicroStrategy (NASDAQ:MSTR) is a progress inventory with an uncommon historical past. It began life as a software program firm however in late 2020, it started shopping for cryptocurrency as a way of shoring up its stability sheet. It now claims to be the “largest company holder of Bitcoin on the earth”.
And it seems to have caught the eye of many buyers on each side of the Atlantic.
Of the 11 US analysts masking the corporate, 10 take into account it a Purchase.
Nearer to house, through the week ended 3 January, it was the most well-liked inventory with Hargreaves Lansdown’s shoppers. Of all that week’s purchases on the platform, MicroStrategy noticed essentially the most exercise, each by way of trades (3.21%) and the worth of offers positioned (5.04%).
An prolonged bull run
Not surprisingly, this curiosity has helped drive its value increased.
Since January 2024, it’s elevated by 470%.
And this spectacular efficiency reveals no indicators of slowing down. Helped by the prospect of a second Trump presidency (he’s seen as being extra pro-crypto than Joe Biden) through the first eight days of 2025, the inventory’s up 18%. Previous efficiency just isn’t an indicator of future efficiency although, after all.
However a better take a look at the statistics is revealing.
Though it was the post-Christmas primary with Hargreaves Lansdown’s consumers, it was additionally fashionable with sellers, accounting for 4.55% of all trades.
This may very well be an indication that the inventory’s being purchased with a view to creating a fast revenue, relatively than for its long-term progress prospects.
It may additionally clarify why it’s essentially the most risky inventory on the S&P 500. Though its accomplished properly in 2025, I believe it’s value noting that it’s fallen 28% from its November 2024 peak.
Seeking to the long run
However the firm does have a progress technique, albeit a easy one. It plans to purchase extra Bitcoin, and many it.
Over the following three years, it hopes to buy $42bn of the digital asset.
Nonetheless, provided that MicroStrategy’s software program enterprise isn’t money generative — through the 9 months ended 30 September 2024, it reported a post-tax lack of $48m — all the funds must come from a mixture of debt ($21bn) and fairness ($21bn).
And so long as Bitcoin doesn’t crash, I’m certain every thing can be okay. In any other case, I worry it’ll be catastrophic for the corporate and its shareholders.
The content material on this article is offered for data functions solely. It isn’t meant to be, neither does it represent, any type of funding recommendation. Bitcoin and different cryptocurrencies are extremely speculative and risky belongings, which carry a number of dangers, together with the entire lack of any monies invested. Readers are liable for finishing up their very own due diligence and for acquiring skilled recommendation earlier than making any funding selections.
Leverage
Newest stories recommend that the corporate at present owns 447,470 Bitcoin, value roughly $43bn. Its market cap is $84bn — 95% increased.
In different phrases, buyers are completely satisfied to pay extra for the Bitcoin held by MicroStrategy than in the event that they purchased it immediately themselves.
To my shock, this implies its share value has outperformed the worth of the cryptocurrency over the previous 12 months by an element of 4.
This doesn’t seem sustainable to me.
And it means that if the worth of Bitcoin falls, the inventory market valuation of MicroStrategy will crash by much more.
Personally, I don’t need to add this stage of threat (or volatility) to my share portfolio. I’m due to this fact going to avoid MicroStrategy, regardless of the hype surrounding the inventory.
