As of this writing, the company owned approximately 92,079 of the original cryptocurrency, and it just sold more debt to raise cash — which it plans to use to buy more bitcoin.
Shares are up over 260% since the start of 2020, going from under-the-radar boring tech stock to blockbuster hit in a short span of time.
It has innovated over the years, adapting to the cloud-computing era and improving the insightfulness of its data visualization suite for users.
Historically, it generates operating margins in the low-teen percentages, and at the start of 2020, it had over $400 million in cash and equivalents and no long-term debt.
First was the repurchase of $250 million of company stock — at the time, about 20% of MicroStrategy’s total market cap.
This investment reflects our belief that Bitcoin, as the world’s most widely adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.
As a software firm itself, it isn’t so unreasonable to think of a company like MicroStrategy converting its liquid assets into digital money and giving itself options down the road if bitcoin continues to gain traction and acceptance in the global economy.
And given the fact Bitcoin is up some 270% since last summer, the speculative play has paid off thus far.
At the end of March 2021, cash and equivalents totaled $82.5 million, bitcoin holdings were worth $1.95 billion, and debt used to buy the digital coins totaled $1.66 billion.
Perhaps the speculation has gotten out of hand, but this is still a profitable software firm that has gotten a huge bump from its bet on digital assets.
Longer-term, the company could figure out some interesting ways to leverage its crypto holdings if it becomes a meaningful part of the global financial system.