- Famous CNBC host Jim Cramer recently advised his audience against buying MicroStrategy’s stock, suggesting direct purchase of Bitcoin instead.
- Despite this, MicroStrategy has significantly outperformed Bitcoin on a year-to-date basis, with predictions of a major surge this year.
- However, the company reported a quarterly net loss of $53.1 million last month, with Bitcoin-related gains not reflected in the report.
Explore the recent developments surrounding MicroStrategy’s stock performance, their Q1 results, and CNBC host Jim Cramer’s advice against investing in the company’s stock.
The Bull Case for MicroStrategy
MicroStrategy has seen substantial outperformance compared to Bitcoin on a year-to-date basis. Investment banking firm TD Cowen predicts that the stock could witness a significant surge this year. The potential for institutions to invest in Bitcoin ETFs could be a major bullish catalyst for MicroStrategy, according to TD Cowen. The company is also expected to benefit from the anticipated rejection of Ethereum-based spot ETFs later this month. MicroStrategy’s CEO, Michael Saylor, believes that Bitcoin ETFs would not pose a threat to the company as ETFs charge fees, while MicroStrategy provides “intelligent leverage” without charging a fee.
MicroStrategy’s Q1 Results
In the recent quarterly report, MicroStrategy reported a net loss of $53.1 million. The Bitcoin-related paper gains recorded by the company in Q1 were not reflected in the report since the firm has not yet opted for the new accounting rule. Last month, broker Benchmark suggested that the company could be included in the S&P 500 index if it were to adopt the new accounting standard. The Financial Accounting Standards Board (FASB) allowed companies to report digital currencies on their balance sheets at fair value starting from 2025, but these new accounting rules could be adopted earlier.
A Wild Ride for MicroStrategy
MicroStrategy’s stock has been on a wild ride due to the Bitcoin bull run. The company came close to receiving a margin call in 2022 when the cryptocurrency saw a massive plunge. CNBC host Jim Cramer taunted Saylor on social media, questioning the company’s strategy and suggesting that they might have a plan to prevent the margin call from being triggered.
Conclusion
Despite the recent net loss reported by MicroStrategy and the advice against investing in the company’s stock by CNBC host Jim Cramer, the company has outperformed Bitcoin this year and is predicted to surge further. The company’s strategy of providing “intelligent leverage” without charging a fee could potentially shield it from the threat posed by Bitcoin ETFs. However, the company’s future performance will depend on various factors, including its adoption of new accounting rules and the performance of Bitcoin.
