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MicroStrategy is up nearly 1,100% since making Bitcoin pivot in 2020

Published 05/29/2024, 08:12 AM
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According to a note from Canaccord, MicroStrategy, the enterprise software company, has seen its stock soar by nearly 1,100% since it embarked on a bold strategy to adopt Bitcoin as its primary treasury reserve asset in August 2020.

Canaccord stated that this strategic pivot, led by CEO Michael Saylor, has been a significant driver of the company's remarkable stock performance.

They note that the transformation of MicroStrategy into a Bitcoin-centric entity has been marked by several key milestones.

The Financial Accounting Standards Board (FASB) adopted fair value accounting treatment for Bitcoin held on corporate balance sheets late last year, enhancing transparency and valuation accuracy for Bitcoin holdings.

Additionally, the approval of U.S. spot Bitcoin ETFs has facilitated Bitcoin's evolution into an institutional asset class, further validating MicroStrategy's strategy.

Canaccord believes these two key milestones in bitcoin's own evolution could have been catalysts in the recent decision of life sciences company Semler Scientific (NASDAQ:SMLR) to adopt Bitcoin as its corporate treasury currency.

Canaccord adds that as MicroStrategy's market cap has surged from approximately $1.4 billion at the start of its Bitcoin journey, its equity premium relative to its Bitcoin holdings has remained resilient.

"In addition, MSTR stock performance since adoption of its bitcoin strategy in August of 2020 (up almost 1,100%) could not have hurt either," they wrote.

MicroStrategy's success underscores the potential for Bitcoin to drive shareholder value in maturing companies amid high inflation and stock valuation pressures, as highlighted by Canaccord.

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