Why Is MSTR Stock Surging Today Despite Last Week Q4 Loss?

Strategy’s stock, MSTR, has posted serious gains following its consistent decline in value. This is despite the Bitcoin treasury firm recording over $12 billion in losses in the last quarter.

MSTR Stock Surges Regardless of Strategy’s $12.4B Loss

The MicroStrategy stock surged as high as 27% at Friday’s close of trading. This came after the shares had been on a downward spiral due to a continuous decline in Bitcoin’s value.

The pump also came despite its Bitcoin treasury reporting a $12.4 billion loss in its Q4 report. Instead of the projected dump, however, the MSTR stock price rebounded. The rise has been attributed to various causes by several experts:

For example, the company’s chief executive sounded in high spirits about the future of Bitcoin, as he told investors to remain patient after viewing a tough run in cryptocurrency markets.

On Friday, Phong Le, the CEO of Strategy, talked about the losses and volatility recently seen in the market and why he believes the best days are ahead of Bitcoin during a CNBC interview.

Le also predicted that the BTC price could hit $1 million in the next seven years.  “Seven years from now, when Bitcoin’s at a million and goes to 750k, it’ll be a 25% drawdown, he said.” This could be bullish for the MSTR stock.

With respect to the recent quarterly loss incurred by the company, the CEO said, it’s just a GAAP loss and not a true cash loss for the company. Also, Le addressed the issue of leverage by articulating that Strategy has a “fortress balance sheet.” This, in a way, improved investor confidence in the MSTR stock, as its price rose to previous highs.

Michael Saylor Says No Change to BTC Purchase Strategy

Strategy’s founder, Michael Saylor, said they remain focused on his “indefinite Bitcoin horizon” in which digital currency would rise in value relative to “old-school” dollars. In the course of the earnings call, he said that Microstrategy’s debt covenants of the firm would remain safe even in the case of a 90% overnight decline in the price of Bitcoin.

Additionally, the founder hinted at another purchase of the coin in his regular Sunday X post.

The MSTR stock price today is trading at $132.48, rebounding from its previous lows of $102. TD Cowen analysts had also shared that the shares could go as high as $440 in the coming months.