MicroStrategy's ($MSTR (-7,42Â %) ) share price currently seems overvalued to me. The company currently owns 499,096 Bitcoins, which at a Bitcoin price of USD 85,470 have a total value of around USD 42.7 billion. At the same time, Strategy has net debt of around USD 4.2 billion, resulting in net assets of around USD 38.5 billion.
Comparing this to the current market capitalization of around USD 106 billion (with a share price of USD 255.43 and 415 million shares outstanding), the stock appears to be trading well above its fundamental value.
Based on a realistic valuation, the share price should be around USD 92.77 - i.e. around 63.7% below the current price. Unless Strategy's bitcoins are worth more than all other bitcoins, or the market expects a massive increase in the bitcoin price.
MicroStrategy shows no growth in operating business. Revenue fell by 3% to USD 120.7 million in Q4 2024. In addition, the company has reduced its workforce by around 20%, particularly in research, sales and consulting. The software business contributes only minimally to the valuation. So why are you investing?
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