By Mackenzie Tatananni
MicroStrategy has strayed far from its roots as a software company in its quest to become the world's largest corporate holder of Bitcoin. While its ambitious new plan to fund future purchases of the cryptocurrency may raise eyebrows, analysts said the stock remains an attractive vehicle for investors looking to gain Bitcoin exposure.
The company doing business as Strategy posted a first-quarter loss of $4.23 billion, or $16.49 a share, notably wider than the loss of $53.1 million, or 31 cents a share, a year earlier. Analysts were calling for a loss of 11 cents a share, according to FactSet.
Revenue declined 3.6% to $111.1 million and missed expectations of $116.6 million.
The company also unveiled its so-called 42/42 Plan on Thursday's earnings call, saying it intends to secure a total of $84 billion of capital over the next two years to support its Bitcoin treasury operations.
The announcement came just six months after MicroStrategy introduced an earlier capital-raising strategy called the "21/21 Plan," through which it aimed to raise $21 billion through equity offerings and another $21 through fixed-income securities.
The latest $42 billion increase leaves $56.7 billion to raise by December 2027, and while the scheme is certainly aggressive, Strategy's goal is "by no means out of the question," TD Cowen analyst Lance Vitanza said Friday.
Vitanza noted that both the price of Bitcoin and Strategy's various securities have held up "through the pronounced capital markets volatility seen over the past three months."
On the earnings call, Chairman and former CEO Michael Saylor expounded on the company's strategy to fund its Bitcoin purchases and indicated Strategy would issue new financial instruments for raising capital beyond its current offerings.
Benchmark Equity Research analyst Mark Palmer noted that Strategy now trades at 2.13 times its net asset value, an attractive number "given the company's demonstrated ability to create shareholder value through its treasury operations."
Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com
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May 02, 2025 07:52 ET (11:52 GMT)
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