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An old saying suggests what benefits one party should also benefit another. Could this concept be applied to investment strategies in the corporate world?
Recently, a number of companies have looked to Bitcoin as a way to revitalize shareholder value, particularly after periods of perceived stagnation. While opinions on the strategy’s risk are divided, MicroStrategy (NASDAQ:MSTR) and Metaplanet appear to have benefitted from this move. Their stock values have reportedly soared, increasing by as much as 4,000% and 2,000%, respectively, since they began investing in Bitcoin.
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Could Apple (NASDAQ:AAPL) be next? Michael Saylor, Chairman of MicroStrategy, believes it should be.
“Apple should invest in Bitcoin,” Saylor stated on X (formerly Twitter) this past Tuesday.
Saylor’s suggestion followed comments made by CNBC’s Jim Cramer.
Cramer observed that “the Apple [stock] buyback isn’t delivering results currently.” He proposed alternative strategies like integrating or holding assets, clarifying that it isn’t shameful to consider other avenues.
Stock buybacks are generally employed to boost investor confidence and return capital to shareholders.
Apple revealed a $100 billion buyback program in early May following a fiscal second quarter report that surpassed analyst estimates. Typically, such announcements lead to increased share prices. However, as noted by Cramer, this hasn’t occurred in Apple’s case.
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Apple’s stock has decreased by over 3% since its buyback announcement and is down 19% year-to-date. Contributing factors include Apple CEO Tim Cook’s statement that the company absorbed a $900 million impact from previous tariff policies. Also, the $100 billion buyback was a reduction of $10 billion from the prior year, suggesting a desire to conserve cash in the face of an uncertain economic outlook.
In contrast to Apple’s stock, Bitcoin’s value has increased by 16% since May and year-to-date. MicroStrategy’s stock price has remained steady since May but is up 31% for the year.
However, it remains to be seen whether Apple will take Saylor’s advice. In 2021, Cook acknowledged owning cryptocurrencies like Bitcoin and Ethereum, considering them a reasonable component of a diversified portfolio. He also stated that Apple was not planning to invest in them.