Benzinga - Michael Saylor, the CEO of MicroStrategy (NASDAQ:MSTR) in October 2020, hailed Square’s $50 million investment in Bitcoin (CRYPTO: BTC) as “extraordinary news.”
What Happened: MicroStrategy, a business intelligence firm, had already made substantial Bitcoin investments between August and September of 2020, totaling $425 million. Square, now called Block Inc (NASDAQ:SQ), led by Jack Dorsey, followed suit a few weeks later with a smaller investment.
Saylor, known for his bullish stance on Bitcoin, expressed that financial gain was not the motive behind Square’s decision, stating that “they’ve got more money than God.”
Comparing the performance of Microsoft (MSFT) and Square (SQ) over the past year reveals interesting insights.
On October 13, 2020, when Saylor made this comment, the stock prices for MSFT and SQ were $216.9 and $190.47, respectively. Fast forward to October 27, 2023, MSFT’s stock price had risen to $329.81, a 52.05% increase, while SQ’s stock price fell to $40.02, marking a significant decline of 78.99%.
MSFT Or SQ: Which Offers Better Returns? (Photo: Benzinga)
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Why It Matters: If you had invested $1000 in MSFT, it would have grown to $1520.53. However, the same investment in SQ would have diminished to $210.11, resulting in a loss of $1310.42.
The coefficient of determination (R2) is introduced to assess the correlation between MSFT and SQ. With an R2 value of 0.04999390878938459, it suggests that the two stocks do not frequently move together. This means that the performance of MSFT does not necessarily indicate or influence the performance of SQ, and vice versa.
Price Action: At the time of writing, BTC was trading at $34,237.44, up 0.81% in the last 24 hours, according to Benzinga Pro.
Photo Courtesy: Mykhailo Pavlenko On Shutterstock.com
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