Valuing MicroStrategy Stock Bitcoin – Bitcoin Magazine: Bitcoin News, Articles, Charts, and Guides

This article will explore:

a) How we might discern the value of MicroStrategy (MSTR), a company in a fairly unique situation in the space, as well as the basics of how value investors operate.

b) Whether or not, given that MSTR is so heavily invested in bitcoin, the main opportunity cost of investing in MSTR is owning an equivalent amount of bitcoin. Hence, why it now makes more sense to value it in bitcoin than in dollars. The explanation is followed by some rough attempts to do just that!

c) Why the approach of pricing in bitcoin might become more and more relevant in the future.

As is well known, MSTR is a company which now has significant skin in the Bitcoin game. In August 2020 it was announced that they were adopting Bitcoin as their primary treasury reserve asset. They converted their entire corporate treasury into bitcoin and have continued to convert free cashflows into bitcoin since. There were also two convertible debt issues to follow, the proceeds of which were also fully converted to bitcoin. Most recently in June 2021, there was further non convertible debt issued, using the proceeds to purchase yet more bitcoin.

Some numbers for context. As of the time of this writing (August 5, 2021):