- MicroStrategy‘s stock has risen 538% year-to-date, with some investors projecting a potential 10X valuation of its Bitcoin holdings
- The company currently trades at 2.5X the value of its 386,700 BTC holdings, with a market cap of $90 billion
- At a 10X multiple, MicroStrategy would reach a $364 billion market cap, surpassing companies like Coca-Cola and Adobe
- Bulls expect CEO Michael Saylor to develop financial innovations using the company’s BTC holdings
- Critics, including Citron Research’s Andrew Left, warn of overvaluation and negative working capital
A growing community of MicroStrategy (MSTR) investors, who identify themselves as “Irresponsibly Long MSTR” on X (formerly Twitter), maintain strong bullish positions despite the company’s 538% surge in 2024.
Understanding MicroStrategy’s Bitcoin Multiple
MicroStrategy currently maintains a market capitalization of $90 billion, trading at 2.5X the value of its 386,700 bitcoin holdings. The community’s most optimistic members project a potential 10X multiple, which would value the company at $364 billion – exceeding the market caps of established corporations like Coca-Cola, Wells Fargo, and Adobe.
While the company operates a software business that historically commanded valuations in the single-digit billions, investors primarily focus on its bitcoin holdings when calculating valuations. Though not technically a fund, traders informally refer to MicroStrategy’s bitcoin holdings as its “NAV” (Net Asset Value), despite this term being regulated by the Financial Accounting Standards Board.
Bull Case: Financial Innovation Potential
Supporters within the Irresponsibly Long MSTR community believe CEO Michael Saylor will develop innovative financial products and services based on the company’s bitcoin holdings. One member described MicroStrategy as “a completely new type of capital company that has never been possible before, similar to how BTC was not possible until we had the internet.”
Professional analysts have joined the bullish chorus, with a Canaccord Genuity analyst supporting the possibility of a 10X multiple.
Bear Case: Valuation Concerns
Critics present significant counterarguments to the bullish thesis. Citron Research’s Andrew Left has labeled the stock as overvalued. Other skeptics have characterized the company as “a cash-burning money loser with negative working capital.”
While the 538% year-to-date rally has rewarded optimistic investors, the increasing multiple of bitcoin holdings raises questions about sustainability and risk exposure.
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