MicroStrategy 500% yearly gains beat Bitcoin, Tesla stock — Is MSTR the best short-term bet?

Nasdaq-listed software intelligence firm MicroStrategy (MSTR) has massively outperformed Bitcoin (BTC) over the past year.

MSTR stock has surged by over 500% in a year and 150% year-to-date (YTD) to reach around $1,279 per share as of May 21. In comparison, Bitcoin’s price has jumped by 166% in a year and around 60% YTD.  

MSTR vs. BTC/USD performance in a year. Source: TradingView

Why is MicroStrategy outperforming Bitcoin?

MicroStrategy’s premium to Bitcoin reflects investor confidence in the company’s management, its strategy of leveraging debt to acquire more Bitcoin and the potential for future growth beyond the value of its Bitcoin holdings alone.

In the first quarter of 2024, MicroStrategy reported revenues of $115.2 million, falling short of analyst expectations of $121.73 million and reflecting a 5.5% year-over-year decline. The company also posted a net loss of $53.1 million, or $3.09 per share, starkly contrasting the net income of $461.2 million, or $31.79 per share, reported in the same period last year.

MicroStrategy’s revenue and billings Q1/2024. Source: Seeking Alpha

Meanwhile, MicroStrategy reported a net long-term debt of $3.55 billion, which can be serviced by cash flows generated from its core business model. The company is now building a Bitcoin-based decentralized ID solution in what appears to be a bid to boost its revenues in the coming quarters.

MicroStrategy’s Bitcoin per share up 50% since 2021

MSTR’s overvaluation versus Bitcoin comes from the fact that the company’s BTC per share has increased by 50% since Q1/2021.

In March 2021, MicroStrategy held 91,064 BTC with 11.3 million shares outstanding, equating to approximately 0.008059 BTC per share. By December 2022, the company increased its holdings to 132,500 BTC and had 11.5 million shares outstanding, raising the BTC per share to about 0.011522.

MicroStrategy’s Bitcoin purchases chart. Source: SaylorTracker.com

As of March 2024, MicroStrategy held 205,000 BTC with 17 million shares outstanding, resulting in approximately 0.012059 BTC per share. 

MSTR also beating most crypto-exposure stocks

Investors are willing to pay more for…

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