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    How Bitcoin helped MicroStrategy beat likes of Facebook, Apple in US markets

    How Bitcoin helped MicroStrategy beat likes of Facebook, Apple in US markets

    How Bitcoin helped MicroStrategy beat likes of Facebook, Apple in US markets
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    By CNBCTV18.com  IST (Published)


    Despite reporting a net loss of $7.5 million in 2020, MicroStrategy’s stocks shot up 358 percent. A timely decision by its CEO Michael J. Saylor came in handy.

    The COVID-19 pandemic has shaken up economies all around the world. With shares of many companies only now starting to hit pre-pandemic levels, several other sectors have reaped huge dividends over the last year. Technology and IT sectors, in particular, have seen a surge in stock prices with the rapid digitisation following the COVID-19 disruptions pushing the upward movement. Companies like Apple, Facebook, Amazon and others have posted double-digit growth in their shares. Apple is up nearly 36 percent over the past year while Facebook is up by 41 percent.
    Alongside these household names, another US company, MicroStrategy, has staged a dramatic rally.
    MicroStrategy is a business intelligence, mobile software and cloud-based services major,  founded in 1989. While the company reaped the benefits of the dot-com boom, it also subsequently lost a huge percentage of its value as the bubble finally burst.
    The company has introduced products like MicroStrategy, MicroStrategy Analytics, MicroStrategy Mobile and Usher. It competes with SAP AG Business Objects, IBM Cognos and Oracle Corporation.
    According to recent regulatory filings, the company has nearly 2,000 employees with a net loss of $7.5 million in 2020, with revenues of $480 million in the same period, a decrease in both metrics over its last filing. At the same time, the company’s shares have rallied by $500 or over 358 percent over the past year. The company’s shares are valued higher than the likes of Facebook, Apple, Wells Fargo and others.
    What's Bitcoin got to do with it
    The reason behind this rocket-high valuation is found in MicroStrategy’s filings -- the company has invested over $2.2 billion in purchasing Bitcoin. The company holds over 100,000 BTC tokens, which were purchased at $24,311. With this year’s rally in Bitcoin prices, which saw the largest cryptocurrency reach over $60,000, MicroStrategy’s shares have become a proxy for many investors to have exposure to Bitcoin.
    “If I had chosen gold instead of Bitcoin last year, it would have been a multi-billion dollar mistake. It doesn’t help to diagnose the problem if you don’t choose the right solution,” recently tweeted Michael J. Saylor, the CEO, Chairman and Co-Founder of the company. Saylor has been held as the key person driving the company’s all-in strategy in Bitcoin.
    The company had recently announced that it bought an additional $177 million worth of Bitcoin and is now quickly shifting its primary focus to acquiring the crypto asset. Its Bitcoin holdings are now worth over $5 billion already, but MicroStrategy is trying to raise additional capital to complete further purchases of the world’s largest cryptocurrency.
    While Elon Musk, the CEO of SpaceX and Tesla, has long been called the world’s biggest advocate of Bitcoin, Taylor may be more deserving of the title. Musk had announced earlier in the year that Tesla had bought Bitcoin, after which the Bitcoin bull rally started. On the other hand, Saylor has shown that MicroStrategy’s core mission is to continue accumulating more Bitcoin.
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