• Press Releases
    • Submit a press release
    • Read All
  • Contact us
Advertise
Bitcoinist.com
No Result
View All Result
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
    • Price
      • Bitcoin Price
      • Ethereum Price
      • Binance Coin Price
      • Litecoin Price
  • Industry
    • Industry News
    • Press Releases
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • How to do Crypto Gambling
      • Crypto Casinos
        • Ethereum Casinos
        • Solana Casinos
        • LiteCoin Casinos
        • DogeCoin Casinos
        • Live Crypto Casinos
        • New Casinos
        • Instant Withdrawal Casinos
        • Cash App Casinos
        • No KYC Casinos
        • VPN Casinos
        • Offshore Casinos
          • Crypto Casinos IT
          • Crypto Casinos ES
            • All Guides
          • Crypto Casinos JP
          • Crypto Casinos SG
          • Crypto Casinos MY
          • Crypto Casinos KR
          • No GAMSTOP Casinos in UK
          • No Cruks Casinos NL
      • Crypto Betting
        • No ID sportsbooks
    • Play Crypto Games
      • Crypto Poker
      • Crypto Slots
      • Crypto Blackjack
      • Crypto Crash Gambling
        • Aviator Sites
      • Plinko
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Events
  • Play Games
Breaking News: Bitcoin Price Makes History By Crossing $126,000: Options Market Forecasts Next Price Targets
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
    • Price
      • Bitcoin Price
      • Ethereum Price
      • Binance Coin Price
      • Litecoin Price
  • Industry
    • Industry News
    • Press Releases
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • How to do Crypto Gambling
      • Crypto Casinos
        • Ethereum Casinos
        • Solana Casinos
        • LiteCoin Casinos
        • DogeCoin Casinos
        • Live Crypto Casinos
        • New Casinos
        • Instant Withdrawal Casinos
        • Cash App Casinos
        • No KYC Casinos
        • VPN Casinos
        • Offshore Casinos
          • Crypto Casinos IT
          • Crypto Casinos ES
            • All Guides
          • Crypto Casinos JP
          • Crypto Casinos SG
          • Crypto Casinos MY
          • Crypto Casinos KR
          • No GAMSTOP Casinos in UK
          • No Cruks Casinos NL
      • Crypto Betting
        • No ID sportsbooks
    • Play Crypto Games
      • Crypto Poker
      • Crypto Slots
      • Crypto Blackjack
      • Crypto Crash Gambling
        • Aviator Sites
      • Plinko
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Events
  • Play Games
Bitcoinist.com
No Result
View All Result
Breaking News: Bitcoin Price Makes History By Crossing $126,000: Options Market Forecasts Next Price Targets
MicroStrategy Stock Jumps 9% Following Bitcoin Investment; Red Flags Ahead?

MicroStrategy Stock Jumps 9% Following Bitcoin Investment; Red Flags Ahead?

Yashu Gola
by Yashu Gola
5 years ago
·
Posted in Bitcoin
Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

The stock price of MicroStrategy (NASDAQ: MSTR) surged by a little over 9 percent following its acquisition of hundreds of millions of dollars worth of Bitcoin on Tuesday.

The public-traded firm closed the New York session higher at 155.75, up by 9.21 percent. Its gains came as a part of an all-round bullish session for the Nasdaq Composite. The tech-savvy index added 133.67 points, or 1.21 percent, to close the session at 11,190.32.

Bitcoin, cryptocurrency, Nasdaq, MicroStrategy, MSTR
MSTR logs a better-than-average rally on Tuesday after buying $175m worth of Bitcoin. Source: TradingView.com

MicroStrategy increased its exposure in Bitcoin, an unconventional financial asset that aims to play hedge in times of global economic crisis. The firm’s co-founder, Michael Saylor, confirmed the purchase of $175 million worth of BTC units for their capital reserves.

That marked Microstrategy’s second-largest investment into the cryptocurrency since August 2020. Back then, the firm had reallocated $250 million worth of cash reserves to Bitcoin. It feared that the Federal Reserve’s unprecedented monetary policies would weaken the US dollar.

“This investment reflects our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash,” Mr. Saylor had said.

Depressive Data

A report published by Yahoo Finance earlier in September showcased MicroStrategy as an underperforming software company based on the industry’s average Returns on Capital Employed (ROCE). It is a measure of a firm’s yearly pre-tax profit against the capital employed in the business.

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

The ROCE of MicroStrategy stood just 3.5 percent. In comparison, the average ROCE of the Software industry average was 8.6 percent. It now stands down by 25 percent on a five-year timeframe. Moreover, the company has been employing additional capital despite showing any credible improvement in sales last year.

Data provided by SimpleWall.st further showed that Microstrategy’s earnings have declined by 34.6 percent in the last five years.

MicroStrategy, Bitcoin, shareholder returns
MSTR shareholder returns against the industry and market average. Source: SimplyWall.st

The data aggregator portal raised more red flags about MicroStrategy by calling its stock “overvalued” and highlighting its return on equity as low. Nevertheless, it noted that the firm’s Price to Book ratio is better than the industry’s.

“MSTR is good value based on its PB Ratio (3x) compared to the US Software industry average (6.8x), SimplyWall.st wrote.

Bitcoin as Hedge

MicroStrategy’s dramatic shift to an emerging Bitcoin market signaled its likelihood to use the cryptocurrency as a hedge against its weaker financial health.

While the move validated the cryptocurrency a store-of-value asset among the big firms, it also increased the possibility of major bearish activities should MicroStrategy decide to sell it to offset its losses elsewhere.

The risks increase as the US stock market bubble grows with the monetary support from the Federal Reserve. As it bursts later, it would first impact the stocks of overvalued firms. That poses a severe challenge to MicroStrategy of keeping its bullish bias afloat.

bitcoin, btcusd, btcusdt, xbtusd, cryptocurrency, Euro, EURUSD, cryptocurrency, dollar,
BTC/USD eyes a retest of $11,000. Source: TradingView.com

Overall, Bitcoin should have enough demand on the other side should the $425 million BTC whale decide to dump a portion of its holdings. Else, a significant downside correction should ensue.

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
ShareTweetShareShare

Sign Up for Our Newsletter!

For updates and exclusive offers enter your email.

I consent to my submitted data being collected and stored.
Yashu Gola

Yashu Gola

Follow

Globetrotter Yashu Gola has been working as a financial/crypto market journalist since 2013. He is an information technology graduate, a cryptography junkie, a filmmaking enthusiast, and an avid reader of Jon Erickson, Agatha Christie, JK Rowling, and Isaac Asimov.

Full Profile

Related Posts

Bitcoin

Bitcoin Or Your Life? Israeli Trader Stabbed, $600K Stolen in Home Attack

10 hours ago
Bitcoin vs NASDAQ - ATH voor aandelen, wanneer BTC koers $200k?

Bitcoin vs NASDAQ – ATH voor aandelen, wanneer BTC koers $200k?

1 day ago
นักลงทุนฉลองในห้องโถงอนาคต ท่ามกลางรูปปั้น Bitcoin

Bitcoin แกว่งใกล้ 121K ดอลลาร์ นักลงทุนลุ้นเงินกองทุนไหลเข้าอาจหนุนราคาทะลุแนวต้านสู่ 130K

1 day ago
Square

Square Pushes Bitcoin Adoption Further With Merchant Payment Solutions

1 day ago
Luksemburg inwestuje w Bitcoina

Luksemburg inwestuje w Bitcoina przez fundusz państwowy

1 day ago
Bitcoin

Bitcoin Is The Standard Now: Outperform It, Or Get Left Behind – CEO

2 days ago
Please login to join discussion

Premium Sponsors

Press Releases

  • BNB

    ChatGPT предвижда BNB да достигне $2,500...

    1 day ago
  • Maxi Doge นักสู้เหรียญมีมยืนโพสท่าในสังเวียนมวย

    Binance-Peg DOGE นำโด่ง Top 11...

    2 days ago
  • Find Out Why Whales are Rushing to Buy Bitcoin Hyper’s $22M Presale—Plus, Our $HYPER Price Prediction.

    Find Out Why Whales are Rushing to Buy Bitcoin Hyper’s...

    2 days ago
  • ...

    3 days ago
  • Your Chance to Win Up to 10% Deposit Bonus and Up to 21K $USDT Bonus Prizes at KCEX

    Your Chance to Win Up to 10% Deposit Bonus and Up to 21K...

    3 days ago

Bitcoin news portal providing breaking news, guides, price analysis about decentralized digital money & blockchain technology.

Bitcoin

  • News
  • Price
  • Businesses
  • Acceptance
  • Technology
  • Investment
  • Regulation
  • Reviews

Altcoins

  • News
  • Price
  • Ethereum
  • Ripple
  • Litecoin
  • EOS

Categories

  • Blockchain
  • Security
  • FinTech
  • Technology
  • Trending
  • Breaking News
  • Press Releases
  • How to

About Us

  • Advertise
  • Contact us
  • Editorial Policy
  • Privacy Policy
© 2025 Bitcoinist.com. All Rights Reserved.
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
    • Price
      • Bitcoin Price
      • Ethereum Price
      • Binance Coin Price
      • Litecoin Price
  • Industry
    • Industry News
    • Press Releases
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • How to do Crypto Gambling
      • Crypto Casinos
      • Crypto Betting
    • Play Crypto Games
      • Crypto Poker
      • Crypto Slots
      • Crypto Blackjack
      • Crypto Crash Gambling
      • Plinko
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Events
  • Play Games
Advertise

© 2025 Bitcoinist. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.