According to the latest Bloomberg Report, Microstrategy’s $26 Billion Bitcoin stash is larger than the cash and marketable securities of global market leaders such as International Business Machines Corp., Nike Inc., and Johnson & Johnson.
While Nike held $11.882 billion in cash and marketable securities as of March of this year, IBM recently reported that it held $13.7 billion in cash, restricted cash, and marketable securities. Johnson & Johnson’s latest Q3 report reveals that it had $20 billion in cash and marketable securities.
Notably, only a handful of corporations, including Apple Inc. and Alphabet Inc., hold more assets in their treasuries than MicroStrategy.
Microstrategy’s Unique BTC Strategy
Saylor, a co-founder and chairman, decided to invest in Bitcoin in 2020 as a hedge against inflation while MicroStrategy’s revenue growth stagnated. The firm has acquired 279,420 BTC, which represents roughly 1.33% of the total supply. Microstrategy has employed a unique strategy in which they raise debt capital and use it to purchase bitcoin. The theory behind this strategy is that the company can repay the fiat debt by selling less bitcoin in the future. Other companies are beginning to imitate this strategy.
The company’s shares have surged by over 2,500% as the value of Bitcoin has soared around 700% since the middle of 2020, which has made it the best-performing US major stock during the period.
Microstrategy Shows No Signs Of Slowing Down
Dave Zion, founder of Zion Research Group noted that “Their balance sheet is primarily a function of the price of Bitcoin, They’re not in control of the price of Bitcoin, so they’re just going to ride that wave, and it’s a wave that could go up or down.”
MicroStrategy’s next step is the “21/21 Plan,” where it plans to raise $42 billion, then use it to buy more Bitcoin. MicroStrategy already has 252,200 Bitcoins on its balance sheet, worth more than $21 billion at today’s prices. So the plan is to double the company’s current Bitcoin holdings.
TD Cowen analyst Lance Vitanza noted that “What started as a defensive strategy to protect the value of its reserve assets has become an opportunistic strategy intended to accelerate the creation of shareholder value,”
Bitcoin Bull Run To $100K To Push MSTR Higher?
As Bitcoin is anticipated to reach $100,000 within the next three months, MicroStrategy’s stock is also expected to benefit from this surge. According to Wall Street analysts who have issued 12-month price targets for MicroStrategy over the past three months, the average target is $302.75, with projections ranging from a high of $385.00 to a low of $270.00 as per a CCN report.
Bitcoin is currently trading at $91,181, down by 0.22% in the last 24 hours.
