MicroStrategy’s stock has been making waves on Wall Street, drawing comparisons to the infamous meme stock frenzy surrounding GameStop.
The company, once primarily known for its data analytics services, has become a focal point for investors due to its massive Bitcoin holdings. This shift has transformed MicroStrategy into what many see as a Bitcoin proxy, with its stock riding the highs and lows of the cryptocurrency market.
A Bitcoin-driven strategy
Under the leadership of executive chairman Michael Saylor, MicroStrategy has become synonymous with aggressive Bitcoin acquisition. Since 2020, the company has been purchasing Bitcoin unprecedentedly, labeling the move as a “defensive” strategy to preserve shareholder value. By 2024, that strategy had shifted into overdrive. Over the past year alone, MicroStrategy bought Bitcoin 18 times, including eight acquisitions after the presidential election.
The company now holds approximately 446,400 Bitcoin, equivalent to 2% of the global supply. Saylor has referred to Bitcoin as the digital equivalent of Manhattan real estate, emphasizing its long-term potential. With its debt maturities extended until 2029, MicroStrategy is betting that Bitcoin’s price will be significantly higher in the coming years. However, Bitcoin’s well-known volatility, with 30% or more drawdowns, continues to present a significant risk to this strategy.
Meme stock comparisons
The stock’s performance has parallels the meme stock phenomenon of GameStop and AMC. MicroStrategy’s value surged 358% in 2024, buoyed by Bitcoin’s rally and a wave of enthusiasm from retail investors. The company’s stock also earned a spot in the Nasdaq-100, highlighting its growing influence.
Michael Saylor has embraced the cultural and promotional aspects of meme stock investing, frequently using social media and memes to engage with the cryptocurrency community. Analysts note that this strategy has helped draw attention to MicroStrategy’s activities, even as it has raised concerns about the sustainability of hype-driven stock movements.
Yet Bitcoin’s volatility has a direct impact on MicroStrategy’s stock. In December, Bitcoin’s cooldown triggered a 25% drop in the company’s share price. Still, the stock has remained resilient, thanks to long-term support from its crypto-focused investor base.
Ambitious plans for the future
MicroStrategy shows no signs of slowing its Bitcoin acquisition strategy. The company recently announced plans to raise $2 billion through perpetual preferred stock offerings. As part of its ambitious “21/21 Plan,” the company aims to raise $42 billion over the next three years to purchase even more Bitcoin.
In addition, the company has proposed increasing its authorized common stock from 330 million to 10.3 billion shares, raising concerns about potential shareholder dilution. However, with Saylor controlling nearly 47% of voting power, the proposal is expected to pass.
Bitcoin is approaching the $100,000 mark, with some analysts predicting even higher prices. While the future remains uncertain, MicroStrategy’s all-in approach has cemented its position as a major player in the cryptocurrency space.