MSTR - MicroStrategy Is Hedge Funds' Favorite Meme Stock

2024-07-03 11:35:00 ET

Summary

• MicroStrategy shares have more than doubled this year. This latest spike is tied to a bitcoin-buying binge funded in part by bonds that can convert into stock.
• There’s a corner of the market hungry for these wild swings - hedge fund arbitrageurs. The key to the trade is the magnitude of a stock’s gyrations.
• MicroStrategy supplies that in spades: Its shares are three times more volatile than the broader market, according to LSEG data.

MicroStrategy’s ( MSTR ) co-founder Michael Saylor once ran a humdrum little software firm. Then, for a moment, his company was worth many billions of dollars - or, rather, for three moments. After a dizzying rise and fall in the dot-com bubble and another after the pandemic, his company’s shares have now more than doubled this year. This latest spike is tied to a bitcoin-buying binge funded in part by bonds that can convert into stock. Unlike GameStop ( GME ) or other meme-crazed run-ups, though, this one is a dicey deal with Wall Street....

For further details see: