MicroStrategy: The Momentum Matryoshka
Layers of leverage have made this a bull market darling that is now pricing Michael Saylor's alchemist skills to perfection.
Disclaimer: The information contained in this article is not and should not be construed as investment advice. This is my investing journey and I simply share what I do and why I do that for educational and entertainment purposes.
On November 12, 2023, I published a bear case on MicroStrategy. I argued that the legacy ex-Bitcoin enterprise software business is extremely overvalued because it is stagnant and barely profitable. Michael Saylor had simply pumped its value by positioning himself as the Bitcoin messiah. Whether Bitcoin would come down again or not, I figured that the MicroStrategy bubble had to deflate eventually.
Boy has that article aged like milk! The stock has quadrupled since then to $220 as of this writing. It demonstrates the futility of a valuation-centric bear case, especially in the Age of the Meme.
Feel free to ignore what follows below if you believe that the original article disqualifies me from making any further comments on this company. But I do believe that I have uncovered a potential catalyst for a short entry that I feel inclined to share with you.