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MicroStrategy rebrands as "Bitcoin Development Company," buying MSTR stock may be better than buying BTC

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MicroStrategy rebrands as "Bitcoin Development Company," buying MSTR stock may be better than buying BTC

MicroStrategy founder Michael Saylor stated in a recent CNBC interview that the company will undergo a rebranding, positioning itself as a "Bitcoin development company." He once again suggested that investors should buy MicroStrategy stock instead of Bitcoin, as the company is also riding the AI trend!

MicroStrategy Rebrands Itself as a "Bitcoin Development Company"

Michael Saylor stated in a recent CNBC interview that MicroStrategy is undergoing a rebranding to reflect its strategy of accumulating more Bitcoin and fostering the growth of the Bitcoin network. The decision to reposition itself as a "Bitcoin Development Company" was a natural one.

Saylor noted the current popularity of Bitcoin, citing its lack of correlation with traditional risk assets and its independence from specific countries, companies, product cycles, competitors, wars, weather, and impacts on employees or supply chains.

According to Saylor, MicroStrategy's approach provides greater flexibility than investing in Bitcoin trusts (ETFs). The company can develop software, generate cash flow, leverage the capital markets to accumulate Bitcoin for its shareholders, and contribute to the development of the Bitcoin network.

Buying MicroStrategy Stock Might Be Better Than Buying Bitcoin

MicroStrategy has previously highlighted its advantages in financial meetings, suggesting that investors should buy MicroStrategy stock instead of Bitcoin!

  • Easy to trade with a stock account
  • No additional fees compared to trading on-chain (gas fees) or ETF management fees
  • Continuously increasing Bitcoin holdings by utilizing cash flow
  • Smart leverage by issuing debt to purchase Bitcoin
  • Downside protection with MicroStrategy's core business support
  • Risk management as Bitcoin is tied to MicroStrategy, acting as a derivative product

Utilizing Financial Operations to Purchase 190,000 Bitcoins

MicroStrategy entered the Bitcoin market as early as 2020, continuously acquiring Bitcoin using its own cash, issuing debt, and issuing new shares. The company now holds 190,000 Bitcoins valued at approximately $9.5 billion, comprising 80% of its current market capitalization of around $11.5 billion.

MicroStrategy often issues new shares through cash offerings and then uses the proceeds to buy Bitcoin. Since the company does not need to pay dividends to shareholders, the cost is naturally lower than issuing debt. The chart below shows the cost per share of issuing new shares by MicroStrategy from the third quarter of 2021, ranging from $213 to $728 per share.

10x Research recently used a regression model to explore the correlation between MicroStrategy's stock price and Bitcoin, suggesting that when MicroStrategy is trading at a discount to Bitcoin (according to their model calculations), it might be a better investment choice than a Bitcoin ETF. However, when there is a significant premium, risk considerations should be taken into account.

Recent Performance of MicroStrategy Stock

MicroStrategy's stock price has surged along with Bitcoin, reaching a high of $725, with a year-to-date return of 187%, significantly outperforming Bitcoin's 127% return.