Is Bitcoin Buyer MicroStrategy Worth Its Premium Price?

12 snips

Feb 9, 2025

Jon Weil, a savvy columnist from WSJ's Heard on the Street, delves into the intriguing case of MicroStrategy, previously known as Strategy. He discusses the company's shift from software to a Bitcoin powerhouse, examining the fervent debate over its high stock valuation and aggressive Bitcoin purchases. Weil highlights the psychological aspects of investor behavior and market volatility, questioning whether MicroStrategy's hot status warrants its premium price. Tune in for insights on the intertwining fates of crypto and traditional finance!

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INSIGHT

MicroStrategy's Bitcoin Bet

MicroStrategy, now Strategy, bought large amounts of Bitcoin starting in 2020, causing its stock to surge.
Some find its valuation illogical, as it's worth more than its Bitcoin holdings, leading to questions about investor rationale.

INSIGHT

Overpaying for Bitcoin via MicroStrategy

Buying MicroStrategy stock is like buying Bitcoin at an inflated price.
Directly purchasing Bitcoin offers better value and control without the tax implications of stock ownership.

INSIGHT

MicroStrategy's Wacky Math

MicroStrategy's market cap exceeds its Bitcoin holdings and includes substantial debt, a potential market anomaly.
Retail investors drive up its value, fueled by Bitcoin optimism and Michael Saylor's charisma, overlooking fundamental financial analysis.

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On WSJ’s Take On the Week, co-hosts Gunjan Banerji and Telis Demos talk about the whiplash surrounding tariffs, including what could be next for the U.S. and China. They also get into the latest in the crypto world, from Coinbase’s upcoming earnings to the forthcoming confirmation hearing for Securities and Exchange Commission nominee Paul Atkins. Before turning to this week’s interview, they get into Robinhood’s back-peddling on launching Super Bowl betting contracts after regulators’ pushback.

Later in the show, Gunjan and Telis dive into one of the hottest stocks out there: MicroStrategy, now renamed as Strategy. The software company, which describes itself as a bitcoin treasury, has become a bitcoin buying machine. Since it started purch asing bitcoin in 2020, Strategy’s stock has skyrocketed with an ardent following not unlike the fandom surrounding cult stocks like Palantir and Nvidia. But some are skeptical of the company’s bitcoin strategy and valuation. Jon Weil, columnist for WSJ’s Heard on the Street, joins Telis and Gunjan to explain.

This is WSJ’s Take On the Week where co-hosts Gunjan Banerji, lead writer for Live Markets, and Telis Demos, Heard on the Street’s banking and money columnist, cut through the noise and dive into markets, the economy and finance—the big trades, key players and business news ahead.

Have an idea for a future guest or episode? How can we better help you take on the week? We’d love to hear from you. Email the show at takeontheweek@wsj.com.

To watch the video version of this episode, visit our WSJ Podcasts YouTube channel or the video page of WSJ.com.