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Hey everybody Dave Bartosiak with Trending Stocks. Big shout out to all my HODLERs out there. Your day in the sun has finally come! Bitcoin is surging right now, pushing up over $15,000 for the first time since January 2018. Does that mean you nerds can finally tell everyone else, “Told you so!” I wish you could celebrate by buying the new NVIDIA (NVDA) RTX 3000 series, but unless you want to pay a King’s Ransom on eBay (EBAY), I suggest you hang onto that bitcoin.
We know what this means for the younger crowd. Your fraction of a bitcoin has netted you a whopping $428 in profits. Now you can’t wait to tell me how trading stocks in an old man’s game and I should turn my attention to crypto. Not so fast buddy. There are still many ways to play the bitcoin boom in the regular old boring stock market. In fact, we have an entire portfolio here at Zacks, run by a handsome, albeit furry-faced man. You know exactly what I’m talking about folks, Blockchain Innovators. Rather than give away the secret sauce here, I want to take a look at a stock that is not in the portfolio, yet has been moving along with bitcoin quite dramatically.
Take a look here at Microstrategy (MSTR). The company says they are a leading worldwide provider of business intelligence software. At the surface, that seems like a loose correlation at best to blockchain, let alone bitcoin. However, Microstrategy has been quietly adding bitcoin reserves to its balance sheet. As of September 15th, the company had $425 million of bitcoin. On that date, bitcoin closed the day trading a little more than $10,000. Today’s breakout over $15k means these holdings are now worth nearly $650 million. That $200 million plus move higher won’t be reflected in the company’s revenue, because they are merely keeping in on their balance sheet. But if they did, check this out…
Current quarter revenue for the company is only forecast to come in at $124.6 million. Next quarter is forecast at $119.59 million. The bitcoin holdings have appreciated nearly enough to surpass both these quarters combine.
The stock chart here sure does not look like a stock which is moving sideways with earnings estimates which are dipping. There’s been a huge divergence between the stock price and earnings. The culprit, the bitcoin holdings. While that’s all great when bitcoin is on the move higher, it puts the stock into some serious risk territory when the music stops. If the bitcoin move can continue, look for Microstrategy to continue to run. If bitcoin reverses, lookout below Microstrategy.
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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
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