Bitcoin firm MicroStrategy pops 27% in two days as company’s crypto stake hits $11 billion
MicroStrategy CEO Michael Saylor speaks at the Bitcoin 2021 Convention, a crypto-currency conference held at the Mana Convention Center in Wynwood on June 04, 2021 in Miami, Florida.
Joe Raedle | Getty Images
MicroStrategy‘s HODL strategy is continuing to reward investors.
The company said on Monday that it acquired an additional 3,000 bitcoins for a total of $155 million between Feb. 15 and Feb. 25. MicroStrategy, along with its subsidiaries, now owns about 193,000 bitcoins worth $11 billion.
Michael Saylor, the company’s chairman and ex-CEO and one of the cryptocurrency’s principal evangelists, touted the latest purchase in a post on X, noting that MicroStrategy’s average purchase price over time is $31,544. As of Tuesday, bitcoin is trading at just under $57,000.
MicroStrategy shares surged 16% on Monday and another 10% on Tuesday to close at $871.80.
Founded in 1989, MicroStategy has a business in enterprise software and cloud-based services, but its shareholder value is almost entirely tied to its bitcoin ownership, effectively making the company a proxy for the world’s biggest cryptocurrency.
During MicroStrategy’s latest earnings call on Feb. 7, CFO Andrew King said the company is “the largest corporate holder of bitcoin in the world, and we have remained committed to our bitcoin acquisition strategy with the highest conviction.”
Bitcoin has jumped about 35% this year to its highest since December 2021. Ether, the next-biggest cryptocurrency, is up 42% in 2024, climbing to around $3,250 on Tuesday.
Investors have been increasingly bullish on the bitcoin trade following the SEC’s approval of multiple spot bitcoin exchange-traded funds last month. Bitcoin is up 24% since new ETFs began to trade on Jan. 11, and the funds have brought in billions of dollars in flows.
“The demand that ETFs are bringing to the spot bitcoin market is significantly more than the new supply being produced each day,” said Ryan Rasmussen, an analyst at Bitwise Asset Management. “Institutional capital is still getting up to speed with bitcoin ETFs. I expect a lot more demand is still under the surface and yet to be seen.”
Also buoying trader sentiment is the “halving” event, which occurs every four years and is next set for April. At that point, the production of bitcoin gets cut in half, a process meant to reduce the rate at which new coins can enter the network.
Halvings precede bull runs
The first three halvings — in 2012, 2016, and 2020 — were all tied to bull runs in the price of bitcoin. Research firm Benchmark said in a note on Tuesday that the most recent halving in May 2020 “preceded bitcoin’s dramatic rise from $8,572 to an all-time high of $67,566 in 2021.”
MicroStrategy announced its plan to invest in bitcoin in mid-2020, disclosing in an earnings call that it would commit $250 million over the next 12 months to “one or more alternative assets,” which could include digital currencies like bitcoin. At the time, the company’s market cap was about $1.1 billion.
In the fourth quarter of 2023, the company had its largest single quarterly increase in bitcoin holdings since the end of 2020. Meanwhile, its software and services business generated about $124.5 million in sales in the fourth quarter.
The company is up 33% so far this year, lifting its market cap to almost $15 billion.
Benchmark wrote in its report that even with ETFs providing more ways for investors to access bitcoin, MicroStrategy’s “stock continues to offer investors a unique value proposition.” For example, MicroStrategy has the ability to acquire bitcoin using proceeds from debt and equity issuances, the firm said.
Analysts at TD Cowen wrote in a note on Tuesday that they expect the bitcoin transactions to “prove over time to be accretive to shareholders.”
“MicroStrategy represents a new kind of firm that generates dollar-based cash flow from enterprise software and cloud services but then converts its excess cash flow – on an effectively leveraged basis – into Bitcoin,” the TD Cowen analysts wrote. “What started as a defensive strategy to protect the value of its reserve assets has become an opportunistic strategy intended to accelerate the creation of shareholder value.”
— CNBC’s Dylan Butts and Ari Levy contributed to this report.
Chevron is not seeing signs that the U.S. is close to a recession even as President Donald Trump’s tariffs weigh on expectations for oil demand, CEO Mike Wirth said Tuesday.
“There’s no signs that we see at this point that we are in or close to a recession,” Wirth told CNBC’s “Squawk Box.” “There are signs that growth may be slowing and we have to always be prepared for that.”
The International Monetary Fund on Monday cut its growth outlook for the U.S. this year to 1.8%, down from 2.7% previously.
The oil market is expecting reduced demand as a consequence of Trump’s tariffs and the decision by OPEC+ increase production faster than expected, Wirth said. Chevron isn’t changing its capital spending plans in response to drop in prices, the CEO said.
U.S. crude oil prices have fallen about 11% since Trump announced his tariffs on April 2. West Texas Intermediate was last up about 72 cents at $63.80 per barrel. OPEC and the International Energy Agency have cut their demand outlooks for this year.
Wirth said U.S. onshore oil production in patches like the Permian Basin is likely to pull back if prices hit $60 per barrel. Offshore production likely won’t be affected, he said.
“That’s an area where if we were to be at a $60 price or even lower you’re likely to see activity pull back in this sector and you’ll see the production response over a few months,” Wirth said. “That’s what we should watch, not so much the deep water activity.”
Chevron is not expecting a major direct impact on its business from Trump’s tariffs as energy has largely been exempt from the levies, Wirth said.
“The effects that we feel are likely to be more the macroeconomic effects as they flow through the economy,” Wirth said. “The bigger issues would be what would it mean for growth, and global trade and how does that evolve.”
Executives at oil and gas companies were scathing in their criticism of Trump’s tariffs in an anonymous March survey by the Federal Reserve Bank of Dallas, warning that steel tariffs were raising their costs and low prices could impact their activity.
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Little is known about super-secretive EV startup Slate, but the fledgling brand is rumored to be backed by Jeff Bezos and determined to shake up the existing electric order with an affordable lineup of compact SUVs and pickups with that golden $25,000 price tag.
Now, at least, we know what it’s gonna look like. The battle of the billionaires is on!
Redditor jonjopop over at the spotted subreddit spotted what looks like an early prototype of an unbranded SUV with bizarre “CryShare” wrap. CryShare, as a concept, seems to combine the functionality of a ride sharing app like Uber or Lyft with the familiar (to parent, anyway) idea that small babies will often sleep better in a moving car than in their own cribs … but that’s not what’s important here.
Instead, focus on the vehicle itself – parked on Abbot Kinney Boulevard in Los Angeles without explanation or fanfare, this is our best look yet at the kind of vehicle(s) Slate is likely to reveal in the coming days.
Stumbled upon the Bezosmobile [Slate Automotive…idk?] being revealed with an absolutely bizarre marketing campaign
byu/jonjopop inspotted
Other local automotive journalists caught wind of the public unveiling, too – and our friends at The Autopian (Hi, Matt!) sent their own David Tracy out on the streets of LA to check it out. Tracy took the following video and posted it to Instagram.
The Slate breaking cover and causing buzz just ahead of what’s sure to be a painful Q1 earnings call for Tesla is a masterstroke of marketing – especially as doubts surrounding the viability of a “less expensive” Tesla Model Y or Model 3 continue to mount amid the uncertainty of Trump’s tariffs and declining sales of the brand’s more profitable models both at home and abroad.
As with so much involving Slate, however, there is nothing here written in stone – or even cast in cheese. Nothing has been announced, nothing is promised, and for all we know this might have more to do with the affordable Rivian brand launch, a new BYD, or be a viral marketing bit from some local Art Center design student in (relatively) nearby Pasadena. In fact, about the only thing I think we can say about Bezos (?) new Slate project with confidence today is this: Elon could probably use that drink.
SOURCES | IMAGES: Reddit, The Autopian.
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