With a share price increase of 337 percent, MicroStrategy was almost the best-performing large publicly traded company in 2023. And there is a simple reason for this: Bitcoin (BTC). In 2020, the software company began accumulating Bitcoin, and since then, MSTR stock has been a way for investors to gain exposure to Bitcoin.
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MicroStrategy (MSTR) is up 337 percent
With an impressive increase of 337 percent, MicroStrategy outperformed Nvidia (234 percent) and Meta (194 percent), among others, this year. But MSTR’s rise is also more than twice that of Bitcoin (160 percent).
MicroStrategy is an interesting case. While other tech companies’ stock prices depend on profits and market share, investor interest in MSTR appears to be based solely on the Bitcoins the company owns. The company has 174,530 Bitcoins on its balance sheet with a total value of around $7.65 billion.
According to Joseph Vafi, an analyst at investment bank Canaccord Genuity, MicroStrategy’s software activities make little difference to investors. He said this in an interview with the American broadcaster CNBC.
“It’s Bitcoin. All other (software) activities are healthy and good, don’t neglect them. They are leaders in the software industry. But it doesn’t matter at all.”
The success story of Michael Saylor
As mentioned, the company started investing in Bitcoin in 2020. Previously, the company was only involved in software matters, with profits declining every year. Then-CEO Michael Saylor decided to pour more than half a billion dollars into the work in 2020.
“The reason we chose to purchase Bitcoin is because it represents a form of digital gold. It’s harder than gold. It is smarter, stronger and faster than gold.”
Saylor said in 2020 after the company began investing in Bitcoin. At the time, MicroStrategy was valued at $1.1 billion. Today, the company’s market cap is $8.5 billion. This increase in value is largely due to Bitcoin. 90 percent of the company’s value is its Bitcoin holdings.
Joseph Vafi admires Saylor for his courageous decision to buy Bitcoin on behalf of MicroStrategy three years ago.
“Michael Saylor is a visionary. He saw an opportunity to start this Bitcoin experiment thanks to the company’s large amount of cash and clean balance sheet. It worked out well and they are continuing on this path.”
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