Jim Cramer Warns: Avoid MicroStrategy Stock Amid Bitcoin Buying Spree

Jim Cramer, the host of CNBC's Mad Money, has recently shared his views on Bitcoin and MicroStrategy, advising investors to buy Bitcoin but avoid MicroStrategy stock. This advice comes amidst MicroStrategy's continued accumulation of Bitcoin, with the company purchasing another $1.1 billion worth of the cryptocurrency.

MicroStrategy, led by its executive chairman Michael Saylor, has been on a Bitcoin buying spree for over two years. The company's latest purchase, announced on January 27, saw it acquire an additional 10,107 BTC at an average price of $105,596 per BTC. This brings MicroStrategy's total Bitcoin holdings to 471,107 BTC, currently valued at around $47 billion.

MicroStrategy has spent a total of $30.4 billion on Bitcoin, with an overall average price of $64,511 per Bitcoin. The company has been financing its aggressive Bitcoin buying spree through debt issuance and stock sales. In January, MicroStrategy shareholders approved a 30x increase in the number of authorized Class A common shares to facilitate further Bitcoin purchases.

Saylor has been a vocal advocate for Bitcoin, believing it to be the best inflation hedge and a way to generate better returns for shareholders over the long term. His advocacy has inspired other publicly listed companies to adopt Bitcoin, with notable examples including Tesla, Semler Scientific, and Japan's GMO Internet.

Despite MicroStrategy's bullish stance on Bitcoin, Cramer has advised investors to avoid the company's stock. He believes that MicroStrategy's focus on Bitcoin is a distraction from its core business and that the company's debt levels are concerning. Cramer has also expressed skepticism about the long-term viability of Bitcoin as a currency, preferring to invest in companies that are more focused on their core businesses.