MicroStrategy As A Levered Play On Bitcoin
In recent years, MicroStrategy, Inc. (NASDAQ:MSTR) has emerged as a essentially a levered play on Bitcoin. Over the last year, for example, MicroStrategy was up 468%, while Bitcoin was up 105%.
MicroStrategy’s Bitcoin Balance Sheet Strategy.
What drove MicroStrategy’s outperformance is its Bitcoin Balance Sheet Strategy. MicroStrategy CEO Michael Saylor is arguably the world’s leading cheerleader for Bitcoin. After having turned his company into a machine for acquiring Bitcoin, he presented his strategy to Microsoft Corporation’s board recently.
The general gist of MicroStrategy’s Bitcoin strategy is this:
- Make Bitcoin the company’s primary treasury asset over cash.
- Leverage secondary share offerings and debt offerings to buy more Bitcoin.
- Use its underlying business to generate revenue to service the debt incurred to buy more Bitcoin.
- Attract Bitcoin enthusiasts as shareholders which supports the share price and facilitates secondary offerings used to buy more Bitcoin.
Maybe Another Company Can Do This Better
Last year, another company decided to adopt MicroStrategy’s Bitcoin Balance Sheet Strategy: Semler Scientific, Inc. (NASDAQ:SMLR).