The main reason microstrategy is down today

There are two facets to Microstrategy (MSTR). The first is the side of business intelligence tools, which is actually much less popular than the second side – massive bitcoin (BTC-USD) investor. Microstrategy lost ground because its large bitcoin holdings – around 129,699 according to its latest report – lost ground overnight. Bitcoin briefly fell below $22,000, the latest in a series of declines for the cryptocurrency.

The last 12 months for Microstrategy stocks started off well, but that finally changed. At this time last year, the company was challenging $720 per share. In early November, it cleared $860 per share. This, however, is where the Microstrategy party ended.

By the end of January, the company had lost well under half that figure, hitting just over $350. A small rally followed to push the company back above $500 in March, but that rally also reversed. Now another rally is underway and the company seems to be in between $300 and $350.

Microstrategy’s bitcoin holdings have done a solid job of bringing attention to the company. If he could attract that kind of attention around his business intelligence holdings, it might be a particularly remarkable proposition.

That being said, for now, I am neutral on the company. Too much of his fate seems tied to bitcoin as opposed to his actual stock in trade. This addiction could end up costing him dearly in the future.

Insiders buy Microstrategy shares

Analyst reaction to Microstrategy is somewhat lukewarm at the moment, and this is eerily reflected in measures of investor sentiment. Currently, Microstrategy has a smart score of 6 out of 10 on TipRanks. It’s almost pure neutral; since the score is a scale of 10, it has no exact midpoint, leaving five and six to share the honor. However, insider trading at Microstrategy is a bit of a different story. Over the past three months, Microstrategy insiders have purchased $608,000 worth of stock.

Given stock prices these days, that’s about 2,000 shares. Still, it’s a clear focus on buying.

Microstrategy insiders didn’t actually sell any shares in 2022. The last sale was in 2021, nine months ago, when director Carl Rickertsen sold just over $440,000 worth of shares. The Rickertsen sale was just one of many that took place in the same month.

Due to strong sales that month, Microstrategy insiders were found to be slightly weighted in sales. There have been 11 sell trades in total over the past 12 months compared to just seven buy trades. Most purchase transactions have taken place this year, however.

Stock MSTR – Not focused enough on business intelligence

Much of the news about Microstrategy stems from its massive bitcoin holdings. However, there is a real problem. Although this is an important part of Microstrategy’s business, much less focus is placed on the other part of Microstrategy’s day-to-day operations. Specifically, its business intelligence products.

Currently, the global market for embedded business intelligence is around $26 billion. Over the next six years, analysts expect a compound annual growth rate of 11.8%. In 2028, that will bring it to around $73.35 billion. Having a share of this market is absolutely no slouch.

Microstrategy’s decision to hold bitcoin was a winner. The company’s shares seem to go up and down with every major change in the value of the cryptocurrency. That’s probably a big part of why the company didn’t go for art or real estate as a counter-currency hedge. Given recent inflationary shocks, it’s easy to see why currency hedging was important.

However, what we don’t see much of is what Microstrategy is doing in the area of ​​business intelligence. A quick Google News search for “Microstrategy” will tell you as much. The front page mainly focuses on stock price movements and bitcoin holdings.

There is no story about Microstrategy’s Business Intelligence operations before the second page. This is where we find an updated analytics platform that provides tools to improve both security and data governance.

Here’s the real problem for Microstrategy, though. A little further down that second page of the Google News ranking is a story from Analytics India Magazine. The title? “Should Microstrategy still be called a BI company?” »

The article notes that while Microstrategy has played an important role in economic intelligence for decades, much of its public development has focused on bitcoin over the past two years. The business press should never be able to viable question whether you are still part of your core industry.

Is MSTR Stock a Good Buy?

On Wall Street, Microstrategy has a moderate buy consensus rating. This is based on three buys and one sell attributed in the last three months. Microstrategy’s average price target of $500.67 implies an upside potential of 70.4%. Analyst price targets range from a low of $180 per share to a high of $950 per share.

Conclusion: MSTR Stock Needs Compelling Business Intelligence Developments

There are things to like about Microstrategy. It continually improves its product line and certainly has a draw to keep its name in the news. However, there is too much focus on bitcoin. The company allowed its sideshow – a brilliant marketing game – to spiral out of control and become the focus of its press. Microstrategy needs compelling business intelligence developments to become a truly attractive option again, and that’s largely why I’m broadly neutral.

It will be interesting to see if the company refocuses on its core business after co-founder Michael Saylor steps down as CEO.

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