MicroStrategy stock soars 10% as it pursues Bitcoin bank ambitions

MSTR (MicroStrategy) shares hit a high of $205 on Friday morning, up over 10%, largely driven by the company’s ambitious strategy to position itself as a Bitcoin bank, Yahoo Finance data shows.

Michael Saylor said in a recent interview with Bernstein that he planned to make the company a leading Bitcoin-focused financial institution like the merchant bank—a Bitcoin bank that could grow into a trillion-dollar company if Bitcoin’s value increases.

“The endgame is to be the leading Bitcoin bank, or merchant bank, or you could call it a Bitcoin finance company,” said Saylor.

According to Saylor, MicroStrategy plans to borrow funds through diverse capital market instruments, and use those funds to invest in Bitcoin. He anticipates an average annual return of approximately 29% on this investment strategy.

Saylor’s prediction is that Bitcoin’s value will surge to millions of dollars per coin in the future, propelling MicroStrategy’s valuation to a staggering $300-400 billion, potentially even reaching the trillion-dollar mark.

“If we end up with $20 billion of converts, $20 billion of preferred stock, $10 billion of debt and say $50 billion of some kind of debt instrument and structured instrument, we’ll have $100-$150 billion of Bitcoin,” Saylor estimated.

“The company trades at a 50% premium, with more volatility and ARR, we can build a company that has a 100% premium to $150 billion worth of Bitcoin and build a $300-400 billion company with the biggest options market, the biggest equity market,” he said.

“And then we basically start to chew into the fixed income markets, and we just keep buying more Bitcoin. Bitcoin is going to go to millions a coin, you know, and then we create a trillion dollar company.”

Unlike traditional banks, MicroStrategy’s visionary Bitcoin bank will not lend Bitcoin. The bank’s target is to create a comprehensive suite of Bitcoin-based financial products, encompassing stocks, bonds, and other investment instruments.

MicroStrategy, under Saylor’s leadership, has been actively acquiring Bitcoin for the past four years. The company uses different ways to fund its Bitcoin purchases, including leveraging debt and equity.

MicroStrategy’s latest Bitcoin acquisition of 7,420 BTC has brought its total holdings to 252,220 BTC, valued at approximately $15 billion. According to data from Bitcoin Treasuries, MicroStrategy is now the world’s largest corporate holder of the flagship crypto.

The company’s Bitcoin playbook has become a source of inspiration for other firms, such as Metaplanet. The Japanese investment company just announced its Bitcoin adoption earlier this year, and has accumulated around 748 BTC so far.