MicroStrategy’s Investment in Bitcoin – Case – Faculty & Research – Harvard Business School
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Abstract
At the end of the second quarter of 2020, MicroStrategy, a Virginia based provider of analytics software and services, announced plans to acquire and hold bitcoin as a part of the firm’s treasury reserve policy and corporate strategy. Within a year, the firm purchased 105,085 bitcoins, which it had acquired for $2.471 billion and had a market value of $3.653 billion. These purchases were financed by the issuance of more than $2 billion in debt. Was this investment in bitcoin sensible? Did MicroStrategy make reasonable capital structure choices? Did the market fairly value MicroStrategy’s equity? Were the different bonds MicroStrategy issued valued appropriately?
