MicroStrategy has ramped up its Bitcoin holdings to 818,334 BTC, acquired at an average price of $77,906 per coin, which has elevated the company’s cost basis to $75,537. This strategic accumulation coincided with a 12% surge in Bitcoin’s price in April, driven by inflows into U.S. spot price exchange-traded funds. As of Sunday, Bitcoin was trading around $78,787, nearing its highest weekly close since January.
However, Wall Street analysts are bracing for a challenging earnings report, with expectations of a loss of $18.98 per share, primarily due to mark-to-market Bitcoin accounting. Concerns also loom over the sustainability of the company’s perpetual preferred security, STRC, which offers an 11.5% dividend yield. Critics, including Peter Schiff, argue that this structure resembles a “Ponzi scheme,” raising questions about cash reserves and the ability to maintain dividend payouts amid potential Bitcoin volatility.
For market professionals, the key takeaway is the dichotomy between analyst ratings and the risks highlighted by skeptics. While the consensus on MicroStrategy’s stock (MSTR) remains a “Strong Buy,” the underlying financial structure and reliance on Bitcoin’s performance warrant close scrutiny.
Source: cointelegraph.com