Strategy has just celebrated the fifth anniversary of its first Bitcoin purchase, a groundbreaking move that has helped its stock price soar nearly 2600% since 2020 and has allowed it to recover from the slump of 2020.
MicroStrategy Inc., now operating under the business name Strategy, purchased its first batch of Bitcoin (BTC) on August 11, 2020, spending $250 million to acquire 21,454 BTC. Founder Michael Saylor described this as its "new capital allocation strategy."
Since then, the company has spent a total of $46 billion to purchase 628,791 BTC, making it the company with the largest Bitcoin holdings among all public or private companies, inspiring countless others to follow its Bitcoin purchasing strategy.
These purchases have driven MicroStrategy Inc. (MSTR) stock price up over 2595% in the past five years, closing above $395 on Friday, compared to a trading price of less than $15 five years ago.
Saylor founded Strategy in 1989, and the company still sells business analytics software and consulting services today.
The company was a darling of the mid-1990s internet bubble, when the value of businesses associated with the emerging and widely adopted World Wide Web skyrocketed, and Strategy went public on NASDAQ in mid-1998.
The stock price of Strategy climbed in the following years, reaching a closing high of $313 in early March 2000, a price that held the peak record for 24 years. However, later that month, Strategy admitted that after reviewing its accounting practices, it had overstated its revenue in 1998 and 1999.
Following this news, its stock price plummeted more than 60% in a single day, triggering a series of lawsuits, with many considering it a key event in the bursting of the internet bubble.
The U.S. Securities and Exchange Commission (SEC) charged Strategy, Saylor, and other executives with fraud, and they later settled without admitting wrongdoing, paying millions in fines.
The stock price of Strategy failed to recover after the accounting scandal, dropping below 50 cents at one point, but fluctuated mainly between $10 and $20 over the next 20 years.
It wasn't until it began purchasing Bitcoin that its stock price grew more than fourfold within 12 months of the first purchase, exceeding $70 for the first time in 20 years, while the price of cryptocurrency rose from about $11,500 to $50,000 during the same period.
Strategy's massive Bitcoin holdings mean its stock price largely follows the ups and downs of cryptocurrency, taking 24 years to surpass the peak of March 2000. MSTR closed at $340 on November 11, 2024—the same day Bitcoin first broke through $80,000.
Saylor stated in May that Strategy plans to raise $84 billion over the next two years, primarily to continue purchasing Bitcoin, which is double the previously announced $21 billion fundraising plan.
The company uses various methods to raise funds, such as convertible bonds and stock sales, to finance its Bitcoin purchases.
According to StrategyTracker, the company currently holds about $28.8 billion in unrealized profits from its Bitcoin investments. Strategy has indicated in regulatory disclosures that it may sell its holdings to pay off billions in debt.
On Sunday, Saylor posted a chart on X showing Strategy's past Bitcoin purchases, adding, "If you don't stop buying Bitcoin, you won't stop making money."
Similar posts often precede announcements of further Bitcoin purchases by Strategy. The company's most recent Bitcoin purchase was on July 29, when it acquired 21,021 BTC.
Related: Michael Saylor is not worried about the rise of Ethereum (ETH) treasury companies.
Original article: “Strategy Celebrates Fifth Anniversary of First Bitcoin (BTC) Purchase, Stock Price Up 2600%”
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