MicroStrategy bitcoin purchases aren’t stopping premium decline
MicroStrategy acquired another $2 billion worth of bitcoin (BTC) last week, but it hasn’t helped investors regain last month’s confidence. The premium shareholders place on its stock is at a two-month low, and its share price is 30% off its all-time high from November 21. MicroStrategy has a small software business, yet most investors calculate its value as a multiple of its BTC holdings. To that end, on November 20, the company owned $31 billion of BTC yet traded at a $106 billion market capitalization — a generous, 3.4X premium. At publication time, that multiple has declined by one-third to 2.2X. On November 20, MicroStrategy owned $31B of BTC and traded at a $106B market capitalization. Over the past three weeks, bullish traders have claimed price targets for MicroStrategy upwards of 10 or even 100 times higher than current prices. Some believe the company can somehow eclipse the value of BTC itself. There are believers that the company’s dilutive s...