MicroStrategy's Bitcoin Bet: A 500% Surge in 2024
Monday, Dec 2, 2024 9:53 am ET
2min read MicroStrategy's (MSTR) 674% year-to-date (YTD) stock price increase is a testament to its bold Bitcoin (BTC) strategy, which has propelled the enterprise software maker to outperform every major US stock since mid-2020. The company's aggressive Bitcoin accumulation, funded through equity and debt offerings, has been a critical driver of its remarkable growth.
In 2024 alone, MicroStrategy raised over $2.1 billion through equity and debt offerings. In Q2, it raised $800 million through an offering of 2.25% convertible senior notes due 2032. Additionally, it raised $2.1 billion in a 0% convertible senior notes offering in November, which includes $400 million from an option to purchase granted to initial purchasers. These capital raising efforts have fueled MicroStrategy's Bitcoin purchases, with the company acquiring 12,222 BTC since the beginning of 2024 for $805.2 million, or $65,882 per bitcoin. As of July 31, 2024, MicroStrategy held 226,500 bitcoins at a total cost of $8.3 billion, or $36,821 per bitcoin. The company's "BTC Yield" KPI, a measure of the percentage change period-to-period of the ratio between its Bitcoin holdings and its assumed diluted shares outstanding, reached 12.2% year-to-date.
MicroStrategy's Bitcoin bet, supported by its successful capital raising efforts, has not only significantly increased its market value but also boosted the performance of ETFs with significant MicroStrategy exposure. As the largest corporate holder of Bitcoin, MicroStrategy's Bitcoin-driven growth has rippled across ETFs, enhancing their returns in a bullish market.
In Q3 2024, MicroStrategy's Bitcoin holdings appreciated by 70% more than their cost basis, reflecting a 17.8% YTD "BTC Yield." This impressive performance demonstrates the company's strategic acquisition of bitcoins and its ability to accrete value to shareholders. MicroStrategy's average acquisition cost per bitcoin, roughly $49,874, has significantly influenced its overall portfolio value and yield. As of September 30, 2024, the market value of MicroStrategy's bitcoin holdings was around $16.007 billion, reflecting an average market price of approximately $63,463 per bitcoin.
MicroStrategy's 500% YTD surge is a result of its well-executed Bitcoin strategy, which has been a significant driver of its stock price performance in 2024. By acquiring bitcoins strategically and funding these purchases through equity and debt offerings, MicroStrategy has been able to generate substantial unrealized profits per bitcoin. The company's aggressive capital raising efforts, combined with its strategic Bitcoin acquisitions, have enabled it to outperform major US stocks and boost the performance of ETFs with significant MicroStrategy exposure.
In conclusion, MicroStrategy's 500% YTD surge is a testament to its bold Bitcoin strategy. The company's aggressive capital raising efforts, strategic Bitcoin acquisitions, and impressive BTC Yield KPI demonstrate its ability to generate significant value for shareholders. As the largest corporate holder of Bitcoin, MicroStrategy's Bitcoin-driven growth has rippled across ETFs, enhancing their returns in a bullish market.
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