Microstrategy’s $26 Billion Bitcoin Stash Now Exceeds IBM and Nike Holdings
According to the latest news Bloomberg Microstrategy’s $26 billion in Bitcoin reserves is larger than the cash and marketable securities of global market leaders such as International Business Machines Corp., Nike Inc. and Johnson & Johnson, the report said.
As of March this year, Nike held $11.882 billion in cash and marketable securities, while IBM recently reported that it held $13.7 billion in cash, restricted cash and marketable securities. Johnson & Johnson’s latest third-quarter report showed the company had $20 billion in cash and marketable securities.
It’s worth noting that only a handful of companies, including Apple Inc. and Alphabet Inc., hold more assets than MicroStrategy.
Microstrategy’s unique BTC strategy
Co-founder and Chairman Saylor decided to invest in Bitcoin in 2020 as a hedge against inflation while MicroStrategy’s revenue growth stalled. The company has purchased 279,420 BTC, which is approximately 1.33% of the total supply. Microstrategy uses a unique strategy where they raise debt capital and use it to purchase Bitcoin. The theory behind this strategy is that the company can repay its fiat debt by selling fewer Bitcoins in the future. Other companies are starting to copy this strategy.
Since mid-2020, as Bitcoin’s value surged about 700%, the company’s shares have soared more than 2,500%, making it the best-performing major U.S. stock over the same period.
Microstrategy shows no signs of slowing down
Dave Zion, founder of Zion Research Group, noted, “Their balance sheet is primarily a function of the price of Bitcoin, and they have no control over the price of Bitcoin, so they just go with the flow, which is a trend that can go up. Or a falling wave.”
MicroStrategy’s next step is “Project 21/21,” which plans to raise $42 billion and then use it to buy more Bitcoin. MicroStrategy already has 252,200 Bitcoins on its balance sheet, worth more than $21 billion at today’s prices. Therefore, the plan is to double the company’s current Bitcoin holdings.
“What started as a defensive strategy to protect the value of its reserve assets has become an opportunistic strategy aimed at accelerating the creation of shareholder value,” TD Cowen analyst Lance Vitanza noted.
Will Bitcoin bull run to $100,000 drive MSTR higher?
With Bitcoin expected to reach $100,000 within the next three months, MicroStrategy stock is also expected to benefit from this rise. According to Wall Street analysts who have issued 12-month price targets for MicroStrategy over the past three months, the average price target is $302.75, with CCN forecasting a high of $385.00 and a low of $270.00. Report.
Bitcoin is currently trading at $91,181, down 0.22% in the past 24 hours.
