MicroStrategy has outperformed the S&P 500 index by 14 times the rate of return growth
Over the past four years, the company’s shares have grown by 1540%, while the index has gained only 111%
16.10.2024 - 16:05
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What’s new? Since August 2020, the shares of analytics software company MicroStrategy (MSTR) have significantly outperformed all companies in the S&P 500 stock index, according to experts at blockchain analytics platform Arkham Intelligence. MicroStrategy began investing in bitcoin in 2020, long the largest holder of the asset among public companies. It has already accumulated 252 220 bitcoins worth $17 billion at the current exchange rate on its balance sheet.
What else is known? Over the past four years, MSTR stock is up 1540%, while the S&P 500 index has added just 111%, according to TradingView.
According to some experts, MicroStrategy itself is unlikely to be included in the S&P 500 anytime soon, as a prerequisite for candidate companies is profitability over the past year and quarter. In turn, MicroStrategy has consistently recorded losses during this period, except for the fourth quarter of 2023.
Analysts at brokerage Benchmark previously noted that inclusion in the index is still possible if MicroStrategy adopts new accounting standards. It currently records unrealized losses on the loss of value of bitcoins purchased, but in 2023, the Financial Accounting Standards Board (FASB) allowed companies investing in cryptocurrencies to measure assets on the balance sheet at fair value. These changes can be reflected in net income each reporting period.
In mid-October, analysts at broker Bernstein noted that the bitcoin exchange rate was rising along with Donald Trump’s chances of winning the US presidential election in November. They called MSTR’s share price an indicator of a potential bullish breakout in the crypto market.
Also, this month, MicroStrategy founder Michael Saylor said that the company intends to become the leading bitcoin bank with powerful tools for inflation hedging and long-term value storage, with a value reaching $1 trillion.
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