MicroStrategy just went on its biggest Bitcoin shopping spree yet. The company spent $4.6 billion between November 11 and 17, scooping up 51,780 Bitcoin in a single week.
According to its filing with the SEC, the company’s total Bitcoin stash now sits at over $29 billion. For a business that started out selling enterprise software, MicroStrategy has transformed into a full-blown Bitcoin whale.
The man behind this relentless Bitcoin buying is Michael Saylor, the company’s co-founder and chairman. Back in 2020, Saylor bet on Bitcoin as a hedge against inflation. Initially, the company used cash for its purchases, but Saylor upped the ante.
Now, MicroStrategy sells stocks and issues convertible debt to bankroll its Bitcoin addiction. If you think $4.6 billion is crazy, Saylor says the company plans to raise $42 billion over the next three years. He’s not slowing down.
How the Bitcoin obsession affects MicroStrategy’s stock
Naturally, MicroStrategy’s stock (MSTR) price moves like it’s tied to Bitcoin with an invisible leash. On November 18, MSTR shares opened at $370.01. The price bounced between $339.37 and $377.34 throughout the day.
The company’s market cap now sits at $74.94 billion, with 15.2 million shares traded that day. While that volume is slightly below its average of 16.9 million shares, it’s clear investors are keeping a close eye on every move the company makes.
If Bitcoin goes up, MSTR usually follows. If Bitcoin tanks, well, you can guess what happens to the stock. MicroStrategy now owns 331,200 Bitcoin. That’s worth a staggering $16.5 billion based on what the company spent to accumulate it.
The average cost? About $49,874 per Bitcoin. Compare that to the $88,627 average price tag for this latest haul, and you see just how committed they are—even at sky-high prices.
Funding the spree: Shares, debt, and high stakes
Let’s talk money. How does a company spend billions on Bitcoin without draining its coffers? MicroStrategy has turned to selling shares under a sales agreement and issuing convertible debt to fund its buying binges.
This approach allows the company to use investor money to keep its Bitcoin ambitions alive. But it’s also risky. The company’s entire future hinges on Bitcoin continuing to rise in value. If it doesn’t, they’re in trouble. Saylor doesn’t seem fazed though. He’s doubling down.
Meanwhile, the stock’s technical setup is also worth noting. Analysts peg its support level at $271.18. If the price dips there, it might attract more buyers. On the flip side, resistance sits at $384.83. This is the point where traders could start selling, pushing the stock back down.
MicroStrategy’s financials, however, paint a less rosy picture. The company reports an earnings per share (EPS) of -$2.49. Its price-to-earnings ratio is a grim -148.41. But for now, the market seems willing to overlook these red flags.
MicroStrategy’s Bitcoin gamble has allowed it to outperform some major names in the tech and crypto sectors. Tesla, for instance, is sitting at $275.00 per share but has been hit by production delays and rising competition.
Coinbase is another story. Trading at $75.00, the crypto exchange has struggled with regulatory headwinds and shrinking trading volumes.
Even NVIDIA, a tech titan trading at $440.00, hasn’t been immune to market corrections. Other players like Block and Palantir are also lagging behind.
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