MicroStrategy, the enterprise software company, has seen its stock skyrocket by nearly 1,100% since adopting Bitcoin as its primary treasury reserve asset in August 2020, according to a recent note from Canaccord.
This dramatic increase in stock value is attributed to a strategic shift led by CEO Michael Saylor, which transformed MicroStrategy into a Bitcoin-centric entity. Canaccord highlighted several key milestones that have marked this transformation.
One significant development was the Financial Accounting Standards Board (FASB) adopting fair value accounting treatment for Bitcoin held on corporate balance sheets late last year. This change has improved transparency and valuation accuracy for Bitcoin holdings, bolstering investor confidence.
Additionally, the approval of U.S. spot Bitcoin ETFs has played a crucial role in Bitcoin’s evolution into a recognized institutional asset class, further validating MicroStrategy’s strategic decision.
Canaccord suggests that these milestones in Bitcoin’s maturation could have influenced Semler Scientific (NASDAQ
), a life sciences company, to adopt Bitcoin as its corporate treasury currency recently.
They also noted that MicroStrategy’s market capitalization has surged from approximately $1.4 billion at the start of its Bitcoin journey. Despite this increase, the equity premium relative to its Bitcoin holdings has remained robust.
“In addition, MSTR stock performance since adoption of its bitcoin strategy in August of 2020 (up almost 1,100%) could not have hurt either,” Canaccord stated.
MicroStrategy’s remarkable success highlights the potential for Bitcoin to drive shareholder value in established companies, especially in an environment characterized by high inflation and stock valuation pressures.
