TLDR
- MicroStrategy bought 1,955 BTC for $217M at $111,196 per coin, raising total to 638,460 BTC.
- Stock trades at $330.30, down 26% since July, as valuation weakens relative to Bitcoin.
- Missed S&P 500 inclusion, losing out to Robinhood despite strong quarterly results.
- Investor pushback grows after management scrapped its 2.5x mNAV dilution safeguard.
- MSTR remains a top BTC proxy with 1,308% 3-year return despite near-term setbacks.
MicroStrategy Inc. (NASDAQ: MSTR), trading at $330.30 as of September 8, announced on Monday the purchase of another 1,955 Bitcoin for $217 million.
The coins were acquired at an average price of $111,196 each, lifting the company’s total holdings to 638,460 BTC. According to its SEC filing, this latest buy pushes the firm’s average purchase price across its Bitcoin reserves to $73,880 per coin.
The announcement coincided with Bitcoin’s climb from $110,500 to $112,200 before retracing to $111,800 after the news broke. MicroStrategy has been the largest corporate holder of Bitcoin, and these buys reaffirm Executive Chairman Michael Saylor’s strategy of tying shareholder value directly to BTC appreciation.
Stock Under Pressure Despite Strong Returns
Despite the aggressive purchases, MSTR shares have struggled. Since July, the stock has lost 26% of its value, pressured by weakening valuation metrics. The mNAV ratio, which measures MicroStrategy’s stock valuation relative to the Bitcoin it holds, has dropped to about 1.5x from its previous levels. This contraction reflects a market view that the stock has become overextended compared to its crypto assets.
Investor discontent has grown after the company reversed its July pledge to avoid share dilution below a 2.5x mNAV threshold. That decision has fueled criticism that management may issue shares even at unfavorable valuations, raising concerns about shareholder dilution.
Missed Chance at S&P 500 Inclusion
Adding to the pressure, MicroStrategy failed to secure a spot in the S&P 500 index last week. Despite meeting all the technical criteria and delivering one of its strongest quarters in history, the slot went to Robinhood (HOOD). For investors who had anticipated the stock’s inclusion as a catalyst, the decision was a disappointment.
Performance and Valuation Metrics
Despite near-term setbacks, MSTR’s long-term returns remain impressive. The stock has gained 14.06% year-to-date, 189% over the past year, and a staggering 1,308.74% across three years. Its five-year return stands at 2,279.70%, far outpacing the S&P 500’s 95.22%.
Financially, MicroStrategy remains robust. With a market cap of $95.24 billion and enterprise value of $106.29 billion, the firm boasts a profit margin of 1,036.61%. Net income sits at $4.73 billion, supported by $462.32 million in revenue and $4.19 billion in levered free cash flow. The company maintains $50.09 million in cash with a manageable 16.31% debt-to-equity ratio.
Outlook
While MSTR stock has faced setbacks in recent months, its role as the largest corporate Bitcoin holder continues to define its identity. Saylor’s latest $217 million purchase underscores his unwavering conviction in Bitcoin as a store of value. However, with investor pushback mounting and index inclusion hopes dashed, the stock’s near-term path may hinge on broader Bitcoin price momentum.
