“MicroStrategy’s Brand Reinvention as a ‘Bitcoin Development Company’: Investing in MicroStrategy Stocks Outperforms BTC Investment”
MicroStrategy founder Michael Saylor recently stated in an interview with CNBC that MicroStrategy will undergo a brand transformation and position itself as a “Bitcoin development company.” He once again suggested that investors should buy MicroStrategy stocks instead of Bitcoin because MicroStrategy has also joined the AI trend.
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MicroStrategy rebrands as “Bitcoin development company”
Buying MicroStrategy stocks is better than buying Bitcoin
Using financial operations to acquire 190,000 Bitcoins
Recent performance of MicroStrategy stock
During his recent interview with CNBC, Michael Saylor stated that MicroStrategy will undergo a brand transformation and reposition itself as a “Bitcoin development company” in order to reflect its strategy of accumulating more Bitcoin and promoting the growth of the Bitcoin network.
Saylor believes that Bitcoin is popular now because it is “unrelated to traditional risk assets and is not affected by any specific country, company, product cycle, or competitor, as well as war, weather, employees, or supply chains.”
Saylor believes that MicroStrategy’s model provides greater flexibility than investment trusts (ETFs). The company can develop software, generate cash flow, and utilize the capital market to accumulate Bitcoin and develop the Bitcoin network.
MicroStrategy has previously mentioned its advantages in its financial report meetings and advised investors to buy MicroStrategy instead of Bitcoin!
Ease of buying and selling (can be traded with a stock account)
No additional fees (no gas fees for trading on-chain, no management fees for ETFs)
Continuous increase in Bitcoin holdings (continuously buying Bitcoin using cash flow)
Intelligent leverage (able to purchase Bitcoin using debt)
Downside protection (supported by MicroStrategy’s core business of business intelligence)
Risk management (I think this refers to Bitcoin being attached to MicroStrategy, like a derivative product!)
MicroStrategy entered the Bitcoin market as early as 2020. The company continuously buys Bitcoin using its own cash, debt, and issuing new shares. It now holds 190,000 Bitcoins, worth approximately $9.5 billion, accounting for 80% of its stock market value (currently around $11.5 billion).
Most of the time, MicroStrategy issues new shares through cash increases and then uses that cash to buy Bitcoin. Because MicroStrategy does not need to pay dividends to shareholders, the cost is naturally much lower than issuing debt. In the figure below, we can see the cost of issuing new shares by MicroStrategy since the third quarter of 2021, ranging from $213 to $728 per share.
10x Research has recently used regression models to explore the correlation between MicroStrategy’s stock price and Bitcoin, and believes that when it is trading at a discount (according to its model calculation, when MicroStrategy’s stock price is lower than Bitcoin), MicroStrategy may be a better investment choice than a Bitcoin ETF, while considering the risk when there is a significant premium.
MicroStrategy’s stock price has recently surged along with Bitcoin, reaching a high of $725 and achieving a one-year return rate of 187%, far higher than Bitcoin’s 127%.
10x research
MicroStrategy
Bitcoin
Further reading
Bitcoin surges 17% in 7 days to $50,000! New high in two years, these predictions are accurate?
Bitcoin ETF underestimated, Andrew Kang predicts $50k Bitcoin in February, new high in March
