According to U.Today, Jim Cramer, the host of CNBC's 'Mad Money', has recently advised his audience against purchasing stocks from business intelligence firm MicroStrategy. Instead, he suggests that those interested in gaining exposure to Bitcoin should directly invest in the cryptocurrency.
MicroStrategy has significantly outperformed Bitcoin on a year-to-year basis, and investment banking company TD Cowen predicts that the stock could see a substantial surge this year. The firm's entry into Bitcoin ETFs could be a major bullish catalyst, according to TD Cowen. The company is also expected to benefit from the anticipated rejection of Ethereum-based spot ETFs later this month. MicroStrategy's CEO, Michael Saylor, has stated that Bitcoin ETFs would not pose a threat to the company as they charge fees, while MicroStrategy offers 'intelligent leverage' without any charges.
In their Q1 results last month, MicroStrategy reported a net loss of $53.1 million. The Bitcoin-related paper gains made by the company in Q1 were not reflected in the recent report as the firm has not yet adopted the new accounting rule. Last month, broker Benchmark suggested that the company could be included in the S&P 500 index if it were to adopt the new accounting standard. The Financial Accounting Standards Board (FASB) allowed companies to report digital currencies on their balance sheets at fair value starting from 2025, but the new rules could be adopted earlier.
MicroStrategy has been performing well due to the Bitcoin bull run, despite coming close to receiving a margin call in 2022 when the cryptocurrency saw a significant drop. Cramer had previously criticized Saylor on social media for the pressure on MicroStrategy's stock due to its borrowing against crypto, suggesting that the company must have a plan to prevent the margin call from being triggered.