Several UK-listed small-cap companies are beginning to apply tactics based on MicroStrategy's experience to attract investments through Bitcoin purchases.
Share Issuance Strategy
Many UK companies are attempting to raise capital by issuing new shares to subsequently buy Bitcoin. This, as company management and shareholders hope, could drive stock prices higher by providing investors with indirect access to the cryptocurrency market, which remains challenging to access in the UK.
How MicroStrategy Outperformed Bitcoin
According to a study by TOBAM, between 2021 and 2024, MicroStrategy's stock surged 7.5 times, while Bitcoin only increased by 3.2 times. This was attributed to three main factors: converting stock premiums into book value, increasing Bitcoin holdings, and leveraging spikes in the premium over Bitcoin's assets.
Risks and Warnings for UK Companies
While this strategy may present new opportunities for UK small companies, it is also fraught with risks. "Bitcoin adoption is no magic wand that turns lead into gold," warns an expert, adding that companies must carefully consider whether this strategy fits their business model.
In conclusion, applying MicroStrategy's strategy may provide UK small companies an opportunity to attract investment; however, success hinges on effective management and execution.
