BizNews Investment Voices: Why I’m buying Saylor’s strategy as a “Bitcoin stock” (without pretending I’m Warren Buffett)

Key topics:MicroStrategy stock trades below value of its Bitcoin holdings.Buying the stock gives leveraged Bitcoin exposure with upside potential.Company still has a small software business as a “bonus” revenue stream..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Last week, I asked you to help me uncover one of South Africa’s smartest investment brains — a fresh, independent voice to cut through the PR fluff, share their personal favourites and tell us what is really happening in the markets.Today, we publish two excellent contributions from tribe members. I was particularly interested to read Don Kruger’s take on the company now known as Strategy, which was called Microstrategy when we profited so handsomely from it in the BizNews portfolios. It was our Bitcoin play - outperforming so much that it grew from the initial 2% to almost 10% of the total pie. We offloaded MicroStrategy at a time when the shares were trading at a significant premium to the value of its Bitcoin stake. Such was the enthusiasm for Michael Saylor’s creation. Much has changed, and as Don explains, the stock now offers a discounted way to acquire the premier cryptocurrency. I’m listening to this exciting investment voice, are you? - Alec Hogg .By Don Kruger*.MicroStrategy (now calling itself “Strategy”) started life as a fairly normal enterprise software company. Then Michael Saylor looked at Bitcoin and basically said: “Yes. All of it.” The result is that MicroStrategy has become a publicly traded vehicle whose main point (for investors like me) is simple: it’s a giant, aggressively leveraged Bitcoin holder wrapped inside a stock ticker.Here’s the headline math that makes me pay attention:MicroStrategy holds about 687,410 BTC.Bitcoin is roughly $91,000.That puts the Bitcoin pile around $62–63B in market value.Meanwhile the company’s market cap is about $45B.If those numbers are even close (and they change constantly), it means the stock market is valuing the entire company at less than the Bitcoin it owns. That’s the part that makes my eyebrows do the little upward thing.So what’s the “buy case,” in normal-human terms?1) I’m potentially buying Bitcoin at a discountIf I can buy a company for $45B that holds $62B worth of Bitcoin, I’m effectively getting exposure to Bitcoin for 70–80 cents on the dollar. That discount can exist for real reasons (more on that below), but if it narrows over time, shareholders win even if Bitcoin just holds steady.2) It’s Bitcoin… with a turbo buttonMicroStrategy doesn’t just sit on Bitcoin. It raises money (debt, preferred shares, issuing stock) and buys more BTC. That can create a kind of built-in leverage: when Bitcoin rises, the stock often rises more. It’s not guaranteed, but historically it’s tended to behave like “Bitcoin, but louder.”3) I get a “bonus” business (small, but real)There’s still a software business producing revenue. Relative to the Bitcoin mountain, it’s not the main attraction—but I don’t hate getting a side dish with my main course.Now, the honest downside (because reality always invoices you eventually):Debt matters. If Bitcoin drops hard, leverage stops being “turbo” and becomes “trap door.”Dilution is real. The company can issue more shares to buy more BTC, which can water down my slice of the pie.It’s still a company. Management decisions, financing structure, and market mood can all move the stock independently of Bitcoin.4) It’s a beautiful chart. Buy the dip or catch the falling knife. .5) The P/E is interesting.It’s not often you come across a mid-cap stock in the US with a P/E hovering around 6. I find that if Saylor can find a way to earn interest on his BTC (think Bitcoin Bank – something he even mentioned as a concept on Twitter), then we may see actual value investing fundamentals come into play. .Read more:.MicroStrategy: The world’s riskiest hedge fund or just a Bitcoin bet with a premium price tag? – Sean Peche.Bottom line: I like MicroStrategy because I want a high-conviction Bitcoin proxy and I believe the market is underpricing its Bitcoin pile (or will re-price it upward). On top of that I also want leverage, and this is one way of getting it without a margin call. I don’t buy it thinking it’s “safe.” I buy it thinking it’s a bold, volatile way to express a bullish Bitcoin view—and sometimes the bold stuff is exactly where the interesting asymmetry lives. Afterall, Bitcoin is my favourite technology and the only thing keeping me up at night is my lack of exposure to it. .*Don Kruger – Head of Platform at EasyEquities

BizNews Investment Voices: Why I’m buying Saylor’s strategy as a “Bitcoin stock” (without pretending I’m Warren Buffett)

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