According to the latter Bloomberg According to the report, Microstrategy’s $26 billion Bitcoin inventory is larger than the cash and tradable securities of global industry 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 this year, IBM recently reported holding $13.7 billion in cash, restricted cash and marketable securities. Johnson & Johnson’s latest Q3 report shows that the company had $20 billion in cash and marketable securities.
Strikingly, only a handful of companies, including Apple Inc. and Alphabet Inc., have more assets in their treasuries than MicroStrategy.
Microstrategy’s unique BTC strategy
Saylor, co-founder and chairman, decided to invest in Bitcoin in 2020 as a hedge against inflation as MicroStrategy’s revenue growth stagnated. The company has acquired 279,420 BTC, which represents approximately 1.33% of the total supply. Microstrategy has used a unique strategy where they raise debt capital and use it to buy 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 starting to imitate this strategy.
The company’s shares are up over 2,500%, while Bitcoin’s value has risen around 700% since mid-2020, making 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: “Their balance sheet is primarily a function of the price of Bitcoin. They have no control over the price of Bitcoin, so they just ride that wave, and it’s a wave that can go up or down.”
MicroStrategy’s next step is the “21/21 Plan,” where it plans to raise $42 billion and then use it to buy more Bitcoin. MicroStrategy already has 252,200 Bitcoins on its balance sheet, which at current prices is worth more than $21 billion. 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 reserves has become an opportunistic strategy designed to accelerate the creation of shareholder value.”
Bitcoin Bull Run to $100K to Push MSTR Higher?
Since Bitcoin is expected to reach $100,000 within the next three months, MicroStrategy stock is also expected to benefit from this rise. According to Wall Street analysts who have set 12-month price targets for MicroStrategy over the past three months, the average price target is $302.75, with forecasts ranging from a high of $385.00 to a low of $270.00 according to a CCN. report.
Bitcoin is currently trading at $91,181, down 0.22% in the past 24 hours.