The company is financing its Bitcoin purchases with long-term, low-interest debt and share issuance.
MicroStrategy (MSTR) has seen its stock price climb over 350% in 2023, largely due to expectations surrounding the approval of a spot Bitcoin exchange-traded fund (ETF) in the United States. At the time of writing, MSTR is trading at $654, up 8.3% intraday.
The company’s massive exposure to Bitcoin (BTC) is backing its stock performance. MicroStrategy and its subsidiaries hold 189,150 BTC, representing a combined purchase price of approximately $5.9 billion and an average purchase price of $31,168 per BTC, according to a report from Cointelegraph.
MicroStrategy exposure’s to the cryptocurrency is leading some analysts to label its stock as “essentially a leveraged Bitcoin ETF.” According to an analysis from Seeking Alpha based on the company’s quarterly earnings, a combination of long-term, low-interest debt and share issuance has been used to finance the company’s BTC purchases.
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Source: https://cointelegraph.com/news/microstrategy-stock-surges-350-percent-2023-bitcoin-etf