MicroStrategy’s stock feels like GameStop these days. Is that good?

MicroStrategy (MSTR) has turned into a Wall Street circus act, and its stock feels like it’s auditioning for a meme stock reboot. One so iconic, it’d put Roaring Kitty to shame.

Investors are glued to this suburban Virginia-based company, not because it’s a leader in data analytics (does anyone even care about that anymore?), but because it’s become a walking, talking Bitcoin experiment.

Thanks to its relentless Bitcoin-buying spree, MicroStrategy is now treated like a crypto ETF with a sprinkle of retail investor frenzy. The numbers? Wild. MSTR soared by 358% in 2024, even making its way into the Nasdaq-100 club.

But as Bitcoin cooled off in December, MicroStrategy gave back 25% of its gains. Still, a yearly performance like that is the kind of stuff that gets the nerds crazy. But is this company a genius for riding the Bitcoin wave or just another potential victim of hype-fueled chaos? Let’s dig in.

MicroStrategy’s Bitcoin obsession

Michael Saylor, MicroStrategy’s executive chairman, is the guy who turned this ship into a Bitcoin casino. His playbook? Buy Bitcoin. Then buy more Bitcoin. And when in doubt, raise billions in debt to—surprise—buy even more Bitcoin. Yes, he is a very special guy.

The company started its crypto journey in 2020, calling it a “defensive” strategy to preserve shareholder value. By 2024, defense turned offense, and MicroStrategy just couldn’t stop. During the year alone, these guys bought Bitcoin 18 times, and eight of those were after the November presidential election.

MicroStrategy now holds a jaw-dropping 446,400 Bitcoin, or about 2% of the entire global supply. Saylor calls this the “forever” strategy, comparing Bitcoin to Manhattan real estate.

“We’ll keep buying the top forever,” he has declared, leaning on the fact that Bitcoin’s price has never been lower over a five-year period.

That’s impressive, sure, but it comes with a side of risk. Bitcoin is famously volatile, with historic drawdowns of 30% or more, even in bullish markets.

Yet MicroStrategy’s strategy hinges on long-term gains. Its debt doesn’t come due until 2029, and analysts argue that the odds of Bitcoin’s value being lower by then are slim.

The meme stock parallels

Saylor has fully embraced meme culture, plastering his social media with rocket ship emojis and Bitcoin memes that make him look like the pope of the crypto church. He plays around with AI and makes fun images of himself with Bitcoin.

Thinking about Bitcoin. pic.twitter.com/aV42LzSjBp

— Michael Saylor⚡️ (@saylor) January 4, 2025

Mark Palmer, an analyst at Benchmark Co., says this behavior makes sense. “What Michael Saylor has done over the past few years is draw attention to what MicroStrategy is doing by embracing social media and meme culture,” he explained. “He hasn’t shied away from over-the-top promotion.”

This approach has worked to some extent, as MicroStrategy has cultivated a crypto-native cheering section. But it’s also invited skepticism. Meme stocks like GameStop and AMC have taught us that hype-driven investing can collapse just as fast as it rises.

And while Bitcoin has a lot more substance than Reddit-fueled stock plays, the volatility remains real. MicroStrategy’s stock moves almost in sync with Bitcoin, which means any crypto dip hits its shares hard.

In 2022, during a Bitcoin bear market, the company’s stock plunged 74% while Bitcoin itself fell 64%. Despite the carnage, MicroStrategy survived. The company emerged from the rubble and doubled down on Bitcoin, becoming even more aggressive in 2024.

What’s next for MicroStrategy?

MicroStrategy isn’t ever slowing down. Earlier this week, the company announced plans to raise $2 billion through perpetual preferred stock offerings.

This is part of its ambitious “21/21 Plan,” which plans to raise $42 billion over three years—half through equity, half through fixed-income instruments—all to buy more Bitcoin.

But wait, there’s more. The company is asking shareholders to approve a proposal to increase its authorized common stock from 330 million to 10.3 billion shares. If that sounds like a dilution nightmare, it is. However, Michael Saylor controls 46.8% of the company’s voting power, so this plan is likely to pass.

Meanwhile, Bitcoin itself is flirting with $100,000 again, and analysts are throwing out wild predictions. A report from H.C. Wainwright, a 156-year-old investment bank, predicts Bitcoin would hit $225,000 this year, thanks to growing institutional adoption and ‘crypto president’ Donald Trump.

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