Pro Charts: Crypto

Michael Saylor's MicroStrategy Stock Is Overvalued

Updated: Mar 27, 2024 | Published: Mar 27, 2024
Verified Investing
By Verified Investing
Michael Saylor's MicroStrategy Stock Is Overvalued

Whether you love Michael Saylor or not, his company MicroStrategy Incorporated (MSTR) is ridiculously overvalued. Here are the facts.

MicroStrategy holds 205,000 Bitcoin. At the current Bitcoin price of $70,000, it is just under $15 billion in value. MicroStrategy trades at a valuation of $32.52 billion at its current price of $1,920. This means that if you strip out all the Bitcoin, the underlying business from MicroStrategy is worth $17 billion.

With yearly revenue of only $500 million and 2024 profits at just $0.50/share, this makes it the most expensive company on Wall Street. Even the underlying business is only supposed to grow at maximum 10%.

Investors need to be careful as MicroStrategy has become a leverage play on Bitcoin. Sure, if Bitcoin continues to soar, MicroStrategy will continue to rise, but the downside is massive should Bitcoin correct.

In addition, MicroStrategy has $2.25 billion in debt. Their underlying business does not support that debt load, so it is all contingent on Bitcoin continuing higher.