MicroStrategy stocks are a great alternative to Bitcoin exchange-traded funds (ETFs) because there are no fees charged for buying and holding the securities. The company's head, Michael Seiler, stated this in an interview with Bloomberg.
“If you’re looking for leveraged bitcoin pledges with positive returns on spot exposure, then MicroStrategy is the only player worthwhile,” he says.
Even spot ETFs that have not yet been approved by the SEC may not be as attractive as investing in MicroStrategy, Saylor said. As an operating company, the latter can generate additional earnings per share, he explains.
On February 1, MicroStrategy released its financial results for the fourth quarter of 2021. During the period, the company reported revenue of $134.5 million and operating expenses of $248 million, including an "impairment loss on digital assets" of more than $146 million.
MSTR's quotes reacted negatively to the release of the report. On February 2, during the pre-trade period, the securities fell by 6%. The share price was unable to recover from the decline due to the impact of the main day and the trading day of February 3.
At the time of this writing, MSTR is trading at nearly $350.
Hourly chart of Nasdaq MSTR/USD. Data: trading view.
MicroStrategy intends to further increase its position in Bitcoin despite the losses incurred by storing digital assets. Saylor emphasized that the company will not abandon this strategy.
In 2021, MicroStrategy generated about $90 million in free cash flow, he said. These funds are used to pay down debt and purchase additional cryptocurrencies. The company is also considering alternative methods of making bulk purchases.
“Perhaps the most compelling and interesting thing is to generate revenue from the 111,000 BTC that is not currently pledged, or to take out a loan secured by this cryptocurrency and then reinvest the funds in new bitcoin,” Saylor said.
He added that the company has not yet made any decisions and that any plans will be tested against risk parameters.
MicroStrategy owns a total of 125,051 BTC, worth about $4.75 billion, and spent about $3.78 billion to buy them (at an average price of $30,200).
MicroStrategy is the first public company to invest some of its own funds in digital gold. In August 2020, the vendor purchased 21,454 bitcoins (approximately $250 million at the exchange rate at the time of the transaction).
MicroStrategy continues to increase its cryptocurrency reserves in accordance with the strategy approved by the Board of Directors.
Since December 2020, the company has begun using not only its own funds but also debt financing to purchase bitcoin, issuing $650 million worth of convertible bonds.
In February 2021, MicroStrategy issued a new tranche of over $1 billion and again invested the proceeds in cryptocurrencies.
Throughout the year, the company continued to invest in Bitcoin. The largest purchases were 13,005 bitcoins in July for $489 million and 7,002 bitcoins at the end of November for $414.4 million.
In December, MicroStrategy announced the acquisition of 1434 BTC and 1914 BTC.
Recall that in January 2022, the company purchased an additional 660 BTC for $25 million.
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