U.Today – Renowned economist and long-time skeptic Peter Schiff issued a forceful warning regarding MicroStrategy (MSTR) stock. In a recent tweet, Schiff stated: “MSTR is easily the most overvalued stock on the market. When he finally falls, it will be a real slaughter.”
Schiff is well known for his outspoken criticism of Bitcoin and cryptocurrencies in general. Schiff, a vocal supporter of gold as a store of value, has often argued that Bitcoin is a bubble and lacks the intrinsic value of classic assets. His latest comments on MicroStrategy stock may stem from this point of view.
MicroStrategy’s market value grew from $1.5 billion to over $40 billion in just four years. Michael Saylor, co-founder and executive chairman, attributes the company’s success to its approach to Bitcoin.
Since 2020, MicroStrategy stock has outperformed all companies in the S&P 500 Index, up more than 1,540%, while the S&P 500 Index is up only 111%. Originally an enterprise software company, today MicroStrategy owns 252,220 Bitcoins – over 1% of all Bitcoins that will ever be mined.
MicroStrategy recently rebranded itself as a Bitcoin development company, exploring novel ways to integrate Bitcoin with classic finance.
MicroStrategy at a 2.5x premium over Bitcoin
MicroStrategy (MSTR) shares continue to rise against the price of Bitcoin (BTC), pushing the premium to the value of its shares to the highest level in over three years.
MicroStrategy’s Net Asset Value (NAV) is calculated by dividing MSTR’s market cap by its Bitcoin stack value. The NAV premium recently reached a fresh high of 2.5 times Bitcoin holdings of approximately $17 billion.
While MicroStrategy’s (MSTR) share price may be high thanks to its forceful valuation relative to the size of its Bitcoin (BTC) holdings, Schiff’s latest warning may lean more towards his skepticism of Bitcoin and companies closely tied to its performance. Time will tell whether his predictions of a MicroStrategy failure and subsequent “bloodbath” will come true.
