COIN - MicroStrategy: A Bad Deal For Investors
2024-03-21 07:43:46 ET
Summary
- MicroStrategy is the largest corporate owner of Bitcoin and just raised more than $600M in additional funds through convertible bonds to buy BTC.
- The firm also offers business intelligence/analytics solutions and targets the enterprise segment for its services.
- Holding a large amount of Bitcoin on its balance sheet creates unique asset concentration risks for MicroStrategy.
- MSTR share price has decoupled from the Bitcoin price, indicating bubble territory. BTC enthusiasts also have no reason to buy Bitcoin through a corporate structure.
- At a BTC price of $62k, I believe shares of MicroStrategy have approximately 30% downside.
MicroStrategy ( MSTR ) is the largest corporate owner of Bitcoin and the investment company benefited greatly from the rise in the Bitcoin price in the last couple of months. The company also just raised another $604M via convertible notes to acquire even more Bitcoin. MicroStrategy further has a subscription business through which it offers business intelligence solutions to the enterprise market. While the firm's approach to acquiring and owning Bitcoin is unique, I don't see a specific competitive advantage for MicroStrategy and investors interested in cryptocurrencies may just want to own Bitcoin outright. MicroStrategy's share price has also fundamentally decoupled from the Bitcoin price which indicates that investors are dealing with a bubble here!...
MicroStrategy: A Bad Deal For Investors