MicroStrategy’s Bitcoin Investment Risk Increases as Price Drops
June 14, 2023
🌧️Trending News
MICROSTRATEGY ($NASDAQ:MSTR):
However, with the recent sharp decline in the price of Bitcoin, MicroStrategy’s risk has significantly increased. The large investment in Bitcoin has been met with both praise and criticism. Some people see the shift to digital currency as a smart move for an established technology company, while others feel that the investment carries too much risk in an unstable market. Regardless of the opinion, the investment has led to many other companies exploring similar paths, with some even launching their own crypto assets. The current market conditions have presented a challenge to MicroStrategy. Long-term investors have taken heavy losses, while many others are holding on in hopes that the price will rebound. As of now, there is no telling what the future holds for cryptocurrency, and it is uncertain how long it will take for prices to recover. For now, MicroStrategy must wait and see how their investment plays out.
Price History
MicroStrategy Incorporated‘s stock opened on Tuesday at $284.3 and closed at $283.8, a 2.2% increase from the prior closing price of 277.7. The company’s high-risk Bitcoin investment strategy has been a main point of concern for investors, as the Bitcoin price continues to drop. Since then, the total value of their Bitcoin holdings has dropped substantially, reducing their cash reserves even further.
The recent drop in Bitcoin value has led investors to question MicroStrategy’s decision to invest in the digital currency, and to reassess their risk tolerance levels. While the potential rewards of such a move could be great if Bitcoin’s value increases, the risks taken on by MicroStrategy are substantial and should not be underestimated. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Microstrategy Incorporated. More…
| Total Revenues | Net Income | Net Margin |
| 501.9 | -877.85 | -7.0% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Microstrategy Incorporated. More…
| Operations | Investing | Financing |
| -3.07 | -242.22 | 245.52 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Microstrategy Incorporated. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 3.03k | 2.58k | 34.25 |
Key Ratios Snapshot
Some of the financial key ratios for Microstrategy Incorporated are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 1.3% | -1.1% | 40.1% |
| FCF Margin | ROE | ROA |
| -51.2% | 418.6% | 4.2% |
Analysis
At GoodWhale, we recently conducted an analysis of MICROSTRATEGY INCORPORATED‘s well-being. Our Risk Rating revealed that MICROSTRATEGY INCORPORATED is a high risk investment in terms of financial and business aspects. We detected five risk warnings in the company’s income statement, balance sheet, cash flow statement, non-financial and financial journal. If you want to take a deeper dive into our findings, you can register on GoodWhale.com and check it out! More…
Peers
The company’s main competitors are Coinbase Global Inc, Riot Blockchain Inc, Bakkt Holdings Inc.
– Coinbase Global Inc ($NASDAQ:COIN)
Coinbase Global Inc is a digital asset exchange company. The Company’s mission is to create an open financial system for the world. The Company operates a digital currency exchange platform for individual and institutional investors, traders, and developers. The Company offers its products and services through its online platform and mobile application. The Company serves customers in North America, Europe, Asia Pacific, South America, and the Middle East and Africa.
– Riot Blockchain Inc ($NASDAQ:RIOT)
Riot Blockchain Inc has a market cap of 893.37M as of 2022. The company’s ROE for the same year is -2.48%. Riot Blockchain Inc is a provider of blockchain technology solutions to the global financial markets. The company’s mission is to be the leading blockchain technology provider in the world.
– Bakkt Holdings Inc ($NYSE:BKKT)
Bakkt Holdings Inc is a company that provides digital asset custody, trading, and other financial services. As of 2022, the company had a market capitalization of 164.26 million and a return on equity of -26.03%. The company’s primary focus is on digital assets, such as Bitcoin, and providing custody, trading, and other financial services related to these assets.
Summary
MicroStrategy Incorporated is a publicly traded business intelligence and enterprise software company that recently made headlines by investing heavily in Bitcoin. As the price of Bitcoin fluctuated in the market, many analysts cautioned investors to be aware of the risks associated with investing in the volatile cryptocurrency. MicroStrategy Incorporated itself warned that the recent price drop posed a significant risk for investors of their company. While investing in Bitcoin could bring considerable profits, investors need to be mindful of the associated risks in order to make informed decisions.
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