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Is MicroStrategy on the Verge of a New High After a Wild Bitcoin Spending Spree?

Bryce TuoheyAvatar
Written by Bryce Tuohey Reviewed by Tim Sykes Fact-checked by Matt Monaco
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MicroStrategy Incorporated’s shares have surged by 13.29 percent on Friday, driven by news highlighting a significant commitment to expand its Bitcoin holdings, which demonstrates its confidence in future cryptocurrency trends.

Recent Market Developments

  • In an unexpected move, MicroStrategy has invested $209M to buy 2,138 Bitcoins, hiking its total holdings to 446,400 Bitcoins. This increased their share price by 4.6% in premarket trading.
  • As Bitcoin’s price flirts with the $99,000 mark, companies like MicroStrategy, tied closely to the cryptocurrency world, post substantial gains.
  • Major digital assets, including Bitcoin, are trading over $97,000, fueling optimism among firms like MicroStrategy and other digital asset investors.

Candlestick Chart

Live Update At 17:20:05 EST: On Friday, January 03, 2025 MicroStrategy Incorporated stock [NASDAQ: MSTR] is trending up by 13.29%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Insights from MicroStrategy’s Financial Report

As millionaire penny stock trader and teacher Tim Sykes says, “Preparation plus patience leads to big profits.” Successful trading requires not just skill and strategy, but also a mindset that balances thorough preparation with patient execution. Traders who rush into decisions without adequate research are often met with losses, while those who take the time to prepare, analyze, and faithfully wait for the right opportunities tend to achieve greater success in their endeavors. This approach emphasizes the importance of combining both knowledge and timing to maximize trading profits.

MicroStrategy managed to pump a staggering amount into its Bitcoin portfolio recently. This acquisition spree is basis the issuing of company shares and has meant their Bitcoin coffers now boast a staggering 446,400 Bitcoin. Such crypto adventures increase perks, especially with Bitcoin nearing a noteworthy $99K.

Examining their profits column, the landscape reveals some troubling patterns. Despite an impressive gross margin touching 73.6%, profitability ratios painted a bleaker picture. Profit margins, especially pre-tax and at the bottom line, remain dipped into negative territory, signaling intense financial stirrings.

The debt was noteworthy, further raising eyebrows. A leverage ratio of 2.2 and total debt nearing the overall equity highlight a bold, but risky financing setup. The ratios, particularly a total debt-to-equity of 1.13, place them teetering on a financial edge.

More Breaking News

Assets, such as cash and equivalents, total a little over $46M. The company’s working capital remains vulnerable with a negative working capital, hinting at a potential liquidity choke-point down the road.

Market Catalysts Impacting Performance

Cryptocurrency’s recent bullish run is sprinkling hope across digital asset companies. The market surge, with Bitcoin reaching nearly $99,000, offers tailwinds to firms like MicroStrategy. Each move increases their digital asset value, but it also inflates market speculation corridors.

Shares surged post Bitcoin add-up. It’s simple: Bitcoin value spikes create ripples for MSTR value. However, the road to big profits or substantial dents banks on Bitcoin’s consistency in price performance.

While increasing Bitcoin bets seem riveting, risks loom high with regulatory uncertainties and digital asset volatilities. The substantial Bitcoin investments lead many toward concerns of potential over-leverage.

Conclusion: Where Does MicroStrategy Stand?

MicroStrategy’s strategies in acquiring Bitcoin juxtapose its current financial dynamics. While the bullish Bitcoin rush momentarily shines bright, they walk a fine line on financial precipices. As millionaire penny stock trader and teacher Tim Sykes says, “Be patient, don’t force trades, and let the perfect setups come to you.” Traders need to weigh if the crypto gamble offers tantalizing opportune gains or if caution flags slow them down knowing the risks intertwined with Bitcoin’s volatility, financial health, and market tides. Time shall uncover if stepping into the Bitcoin rollercoaster brings buoyancy to shareholders or simply rolls them over a wave of unpredictability.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”