MicroStrategy Shares Pumps to 20 Years High as its Bitcoin Investment Gains $300 Million

MicroStrategy shares jumped 26% to become the top stock gainer on Monday. The last time the MicroStrategy shares were this high, at above $343 each, was 20 years back in Sept. 2000.

These gains came on the back of Bitcoin's price, hitting a new all-time high above $19,800 on multiple cryptocurrency exchanges.

Today the digital asset went further above to about $19,950, poised to hit $20k with strong volume before we crashed to around $18,550.

Last week, the business intelligence firm lost $100 million after Bitcoin's price went from $19,500 to nearly $16,300.

Just like losses were large, the gains are now exploding thanks to the company's bet on Bitcoin that raised many eyebrows.

MicroStrategy invested $475 million to purchase 38,250 Bitcoin, at an average price of $11,100 in August and September. At the current prices, that investment has risen to nearly $786 million, adding more than $300 million. MicroStrategy's CEO, Michael Saylor, owns close to 18,000 BTC himself.

Recently, the short-seller Citron Research issued a long call on the leading cryptocurrency after being vocally very skeptical of Bitcoin three years back. Reversing its stance, the firm said it is long on the digital asset and sees no better inflation hedge.

The firm sees the physical ownership of Bitcoin as risky due to the chance of theft while investing in BTC through Grayscale Bitcoin Trust (GBTC) requires one to pay a premium of about 20%.

“Today, MSTR owns more bitcoin than any other publicly traded company,” said Citron in its report adding that it sees MicroStrategy’s bitcoin accumulation to continue. The company is further looking to build a suite of bitcoin data services, it said.

Citron, which has a position in the tech company, has a price target of $700 for MicroStrategy shares.

“As investors scramble to look for ways to capitalize on bitcoin in the stock market, look no further than MSTR,” the report said. “At these prices today, investors are getting a best in class software business at a discount and a free call option on owning a growing treasure chest of bitcoins.”

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