TYSONS CORNER, Va., July 3, 2025 — A recent, comprehensive valuation analysis reveals that MicroStrategy (MSTR) is significantly overvalued, trading at a substantial premium of approximately 98.26% above its calculated Net Asset Value (NAV) per share as of July 3, 2025. This valuation, detailed in a report titled “Valuation Analysis: MicroStrategy (MSTR) Value Per Share as of July 3, 2025,” highlights that MSTR’s market valuation of $403.99 significantly exceeds its underlying Net Asset Value of $203.77 per share. This substantial premium is primarily driven by its unique strategic position as a “Bitcoin Treasury Company,” which the market perceives as a publicly traded vehicle offering leveraged exposure to Bitcoin and an expectation of continued Bitcoin accumulation.
A Bitcoin-Centric Transformation and Aggressive Accumulation
MicroStrategy, historically known as an enterprise analytics software provider, has undergone a profound strategic pivot, transforming into a “Bitcoin Treasury Company”. This fundamental reorientation of the company’s business model prioritizes the acquisition and holding of Bitcoin. As of July 3, 2025, MicroStrategy held approximately 597,325 BTC, valued at an estimated $65.68 billion based on a Bitcoin price of $109,951 per BTC. This figure represents a significant increase from previous reported holdings, such as 471,107 BTC as of December 31, 2024, and 528,185 BTC by March 31, 2025, demonstrating an aggressive and continuous accumulation strategy.
The core of MicroStrategy’s strategy involves continuous capital-raising initiatives explicitly directed towards funding its Bitcoin purchases. As of April 28, 2025, the company had raised $6.6 billion through equity offerings and an additional $3.4 billion through fixed income instruments, including convertible notes. Since October, under its “21/21 plan,” MicroStrategy has issued $20.9 billion in equities and $6.4 billion in fixed income securities. The sheer scale of these capital raises, exemplified by a new $21 billion at-the-market (ATM) common stock equity offering, signals an intent for further substantial capital infusion for Bitcoin purchases. This ongoing accumulation, fueled by these capital raises, is a key factor contributing to the premium MicroStrategy trades at, as investors are effectively betting on the company’s continued growth in its Bitcoin stack.
The Diminishing Role of the Core Business and “Unproductive Assets”
MicroStrategy’s vast Bitcoin holdings, while substantial in monetary value, could be categorized as “unproductive assets” in the vein of Warren Buffett’s investment philosophy. Buffett, a staunch proponent of value investing and long-term asset accumulation, typically favors assets that generate cash flow or produce tangible goods and services. For Buffett, an asset’s true value lies in its ability to generate future earnings or dividends, providing a predictable return on investment. Productive assets, in his view, are businesses that grow their intrinsic value through operational efficiency, innovation, and profitability, such as a factory producing goods, a farm yielding crops, or a company generating consistent software revenue. In contrast, Bitcoin, while a store of value and a speculative investment, does not inherently produce anything; it generates no revenue, no dividends, and contributes nothing to operational profitability. MicroStrategy’s strategy is to continually acquire more Bitcoin through capital raises, effectively transforming the company into a holding vehicle for a non-revenue-generating asset. The company’s traditional software business, which once served as its core, now contributes minimally to its overall asset base and consistently reports losses, further highlighting the unproductive nature of its primary holdings when viewed through a conventional business lens. From Buffett’s perspective, owning a massive quantity of an asset that simply sits there, appreciating or depreciating based on market sentiment rather than underlying economic output, would be considered unproductive, as it does not contribute to the creation of new wealth or ongoing cash flow, making it a speculative bet rather than a true investment in a productive enterprise
The magnitude of capital raises for Bitcoin acquisition far surpasses the revenue generated by the company’s traditional software business. For the first quarter of 2025, MicroStrategy’s total revenue was $111.1 million, a 3.6% decrease year-over-year. This stark contrast highlights that the operational performance of the legacy software business has become secondary in driving shareholder value. Instead, MicroStrategy’s valuation is predominantly a function of its Bitcoin holdings and its demonstrated ability to continue accumulating more.
While MicroStrategy’s balance sheet includes other assets and liabilities from its legacy software business and financing activities, the core software business itself contributes minimally to the company’s overall asset base and has consistently reported losses. As of March 31, 2025, MicroStrategy reported total assets of $43.92 billion and total liabilities of $10.39 billion. Cash and short-term investments stood at $60.30 million as of the same date. The reported total assets figure already incorporates the market value of Bitcoin holdings at that time, which was $43.5 billion, implying that MicroStrategy’s non-Bitcoin assets amount to approximately $0.42 billion. This calculation clearly highlights the overwhelming proportion of Bitcoin on the company’s balance sheet.
In Q1 2025, despite a gross profit of $77.1 million, operating expenses were substantial, reaching $6.00 billion, leading to a net loss of $4.22 billion. Similarly, in Q4 2024, operating expenses were $1.103 billion, which included $1.006 billion in digital asset impairment losses, resulting in a net loss of $670.8 million. Analysts have observed “stagnating revenue growth from the core enterprise analytics segment,” suggesting that the software offerings are not effectively converting new clients or upselling, indicating potential concerns about the long-term viability of this segment independent of the Bitcoin holdings. The consistent operating losses, exacerbated by significant Bitcoin impairment charges, further demonstrate that the core business is not a strong standalone performer and likely represents a drag on overall profitability. Given these factors, the core software business’s intrinsic value is likely minimal or potentially negative when considering its operational losses.
The term “unproductive assets” aptly describes MicroStrategy’s Bitcoin holdings in the context of traditional business operations. While Bitcoin is a valuable asset, it does not generate revenue or contribute to operational profitability in the way a software business typically would. Instead, MicroStrategy’s valuation is predominantly a function of its Bitcoin holdings and its demonstrated ability to continue accumulating more. The market largely disregards the core software business segment, focusing almost entirely on the company’s Bitcoin exposure.
Share Dilution and Volatility Concerns
Accurately determining shares outstanding is crucial for calculating the value per share. As of March 2025, MicroStrategy reported 273.40 million common shares outstanding. A significant factor contributing to this figure is the conversion of convertible notes in January 2025. Substantially all of the $1.05 billion aggregate principal amount of its 0% Convertible Senior Notes due 2027 were converted, resulting in the issuance of 7,373,528 shares of Class A common stock. This conversion of debt into equity, while reducing debt obligations, simultaneously increases the share count, directly impacting the “value per share” calculation by spreading the Net Asset Value across a larger number of shares and effectively diluting existing shareholders. This trade-off is a strategic choice by MicroStrategy to fund its aggressive Bitcoin acquisition strategy, inviting more equity investors to participate in its Bitcoin exposure.
Looking forward, the announced $21 billion at-the-market (ATM) common stock equity offering represents a significant potential for future dilution for current shareholders, which should be considered as a forward-looking risk.
Consolidated Net Asset Value (NAV) Calculation
A Net Asset Value (NAV) approach is suitable for valuing MicroStrategy given the dominance of its Bitcoin holdings and the relatively minor contribution of its core software business. The NAV calculation as of July 3, 2025, combines the most current Bitcoin valuation with the latest comprehensive financial statement data for other assets and liabilities available as of March 31, 2025.
The components of the NAV calculation are as follows:
- Market Value of Bitcoin Holdings (July 3, 2025): $65.68 billion.
- Other Non-Bitcoin Assets (March 31, 2025): Derived by subtracting the market value of Bitcoin as of March 31, 2025 ($43.5 billion) from the total assets reported on that date ($43.92 billion), resulting in $0.42 billion. This derivation is crucial because the total assets figure reported in financial statements includes the value of digital assets, and isolating the non-Bitcoin portion provides a clearer picture of the operational assets.
- Total Liabilities (March 31, 2025): $10.39 billion.
The consolidated NAV is calculated by adding the market value of Bitcoin holdings to the other non-Bitcoin assets and subtracting the total liabilities. This results in a Calculated Net Asset Value (NAV) of
$55.71 billion.
Value Per Share and Market Comparison
The value per share is derived by dividing the calculated NAV by the total common shares outstanding.
- Calculated NAV: $55.71 billion.
- Total Common Shares Outstanding: 273.40 million shares as of March 31, 2025.
Value Per Share = $55,710,000,000 / 273,400,000 shares =
$203.77 per share.
Comparing this calculated value to MicroStrategy’s closing stock price of $403.99 , the market closing price represents a substantial premium of approximately 98.26% over the calculated Net Asset Value per share. This significant divergence indicates that MicroStrategy’s stock trades at a considerable premium to its calculated intrinsic value.
Analysis and Discussion
The substantial premium at which MicroStrategy’s stock trades is a recurring characteristic and reflects a complex interplay of market dynamics and the company’s unique strategic positioning. This premium is largely due to MicroStrategy’s role as a “Bitcoin proxy,” offering a publicly traded vehicle for gaining exposure to Bitcoin. This is particularly appealing to institutional investors or individuals who may face regulatory hurdles or prefer not to directly hold Bitcoin.
Furthermore, MicroStrategy’s strategy of utilizing debt and equity offerings to acquire more Bitcoin provides investors with leveraged exposure to Bitcoin. The market also appears to be pricing in the expectation of future Bitcoin accumulation, reinforced by the announced $21 billion ATM common stock equity offering. The perception of regulatory advantages, as trading a publicly listed equity might be seen as less risky than direct crypto holdings, also contributes to this premium.
Conversely, the core software business, with its stagnating revenue and consistent operating losses, contributes negligibly, if at all, to the positive intrinsic value of the company and could be considered a drag on traditional profitability metrics. The significant operating expenses, often inflated by Bitcoin impairment losses, further obscure any underlying profitability of the software business itself.
It is crucial to acknowledge the inherent volatility of Bitcoin prices, which means the calculated NAV per share can fluctuate significantly on a daily basis. The valuation of the core business was simplified by treating it as its net assets, given its relative insignificance to the overall asset base and its consistent unprofitability. The announced $21 billion ATM offering represents a significant potential for future dilution, which, while not yet factored into the current shares outstanding, could materially impact the per-share value for existing shareholders over time.
The substantial premium at which MSTR trades relative to its Bitcoin NAV is not driven by the fundamentals of its legacy software business but rather by the market’s demand for Bitcoin exposure, MicroStrategy’s distinctive strategy of continuous accumulation, and speculative positioning. This premium can be seen as a “scarcity value” for a publicly traded entity actively and aggressively expanding its Bitcoin reserves. The market is valuing not just the company’s current holdings but also its ongoing strategy of leveraging capital to acquire more Bitcoin. This makes MSTR a highly speculative stock, where its valuation is less dependent on traditional corporate performance and more on Bitcoin price movements and broader investor sentiment towards cryptocurrencies. Any significant downturn in Bitcoin prices or a shift in investor appetite for crypto proxies could rapidly erode this premium, making MSTR’s stock price highly sensitive to external market dynamics beyond its operational performance.
MSTR trades at a significant premium
As of July 3, 2025, MicroStrategy’s calculated Net Asset Value per share, primarily driven by its substantial Bitcoin holdings, stands at $203.77. When compared to its closing stock price of $403.99, MSTR trades at a significant premium of approximately 98.26%. This considerable divergence highlights that the market values MicroStrategy not merely for its underlying assets but for its unique strategic positioning as a publicly traded vehicle offering leveraged exposure to Bitcoin and the expectation of continued Bitcoin accumulation.
For investors, this analysis underscores that MicroStrategy’s stock performance is intrinsically tied to Bitcoin’s price movements and the company’s ongoing capital-raising and acquisition strategy. The core software business, with its stagnating revenues and consistent losses, contributes minimally to the company’s intrinsic value and is largely overlooked by the market. While MSTR offers a convenient way to gain Bitcoin exposure, investors must be aware that the substantial premium over NAV introduces additional risk. This premium is susceptible to changes in Bitcoin prices, shifts in cryptocurrency market sentiment, and the potential for future share dilution from ongoing capital raises. Therefore, an investment in MSTR is predominantly a bet on the future trajectory of Bitcoin and MicroStrategy’s ability to execute its aggressive accumulation strategy, requiring a high tolerance for volatility and a clear understanding of its leveraged nature
Sources:
- SEC.gov: XBRL Viewer (multiple reports)
- Google Finance: MicroStrategy Inc. Class A (MSTR) Stock Price & News
- Nasdaq.com: MicroStrategy Stock Analysis; MicroStrategy Incorporated Common Stock Class A (MSTR) Earnings Report Date
- Business Wire: MicroStrategy Announces Fourth Quarter 2024 Financial Results
- VanEck.com: Deconstructing MicroStrategy (MSTR): Premium, Leverage, and Capital Structure
- AlphaSpread.com: MSTR Intrinsic Valuation and Fundamental Analysis – Microstrategy Inc
- MicroStrategy.com
- StockTitan.net: MicroStrategy Announces First Quarter 2025 Financial Results
- Investopedia: Strategy Buys Another $530 Million Worth of Bitcoin. “Strategy Acquires 4,980 BTC and Now Holds 597,325 BTC.” Barron’s.
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This article presents the author’s personal opinions and analysis and should not be relied upon for investment decisions. Investors should conduct their own research and make their own independent decisions after careful analysis.