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MicroStrategy Bitcoin buying strategy, led by Chairman Michael Saylor, might encounter a significant shift in the near future. As the potential approval of Bitcoin Exchange-Traded Funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) looms on the horizon. This shift could have implications for the company’s financial outlook.
MicroStrategy Bitcoin Accumulation Strategy
In 2020, Saylor initiated the acquisition of Bitcoin, driven by the imperative to reduce the firm’s cash reserves, given the looming threat of inflation. This strategic transition came as the revenue from the software sector showed little growth.
Focused on Bitcoin
Despite stepping down from his role as CEO in the previous year, Saylor expressed his dedication to the Bitcoin component of MicroStrategy’s dual strategy.
In the wake of a pivotal court decision earlier this year, the SEC seems inclined to greenlight ETFs that directly invest in Bitcoin. This development has raised questions among investors and analysts about whether MicroStrategy’s stocks will sustain their premium status.
MicroStrategy’s Premium Position
The company’s recent filing has added to the growing uncertainty. Since mid-2020, Saylor has amassed more than $5.5 billion worth of Bitcoin, driving MicroStrategy’s stock to more than triple in value.
Estimates suggest that MicroStrategy’s shares currently trade at a premium of 30% over the firm’s enterprise value, primarily due to its substantial Bitcoin holdings, which stood at 158,245 as of September.
According to an analytical perspective presented by Bloomberg, if the SEC greenlights the ETFs in the coming months, the premium attached to MicroStrategy’s stocks could potentially decrease to a range between 15% and 25%.
Although the introduction of ETFs may trigger a market surge. Some analysts believe that this could offset the reduction in the premium by boosting the share price of MSTR.
Between August 1 and September 24, MicroStrategy procured 5,445 bitcoins, with an approximate value of $150 million. The company funded this acquisition by issuing and selling a total of 403,362 MSTR shares.
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Disclaimer:
Please note that this article serves solely for informational purposes. As such, Gold Futures it is not financial advice. We strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.
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