Greenlight Capital, an investment management firm, released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. In 2024, the Greenlight Capital funds returned 7.2% net of fees and expenses, compared to 25.0% for the S&P 500 index. The Partnerships have returned 3,117% cumulatively or 12.9% annualized both net of fees and expenses, since its inception in May 1996. The S&P 500 index has returned 1,421% or 10.0% annualized, over the same period. Election uncertainty dominated 2024, and now that the election is over, it seems like there is more uncertainty than ever before. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Greenlight Capital highlighted stocks like MicroStrategy Incorporated (NASDAQ:MSTR), in the fourth quarter 2024 investor letter. MicroStrategy Incorporated (NASDAQ:MSTR) provides artificial intelligence-powered enterprise analytics software and services. The one-month return of MicroStrategy Incorporated (NASDAQ:MSTR) was 14.34%, and its shares gained 663.01% of their value over the last 52 weeks. On January 22, 2024, MicroStrategy Incorporated (NASDAQ:MSTR) stock closed at $377.31 per share with a market capitalization of $93.003 billion.
Greenlight Capital stated the following regarding MicroStrategy Incorporated (NASDAQ:MSTR) in its Q4 2024 investor letter:
“There is an open debate as to whether Bitcoin will at some point enter the mainstream as an official currency. In fact, there is a bill before Congress for the U.S. to establish a “Strategic Bitcoin Reserve” and buy one million Bitcoins over five years. The bill’s purpose appears to be the use of public funds to ramp up the price of Bitcoin, thereby enhancing the wealth of existing Bitcoin holders. This seems a dubious use of taxpayer funds, but the new administration has a lot of Bitcoin-owning supporters, so it might happen. More likely, cooler heads will decide that the government should not borrow another trillion dollars in the bond market to speculate in Bitcoin and that there is, in fact, nothing strategic about doing so.
One of the biggest owners of Bitcoin is MicroStrategy Incorporated (NASDAQ:MSTR). While MSTR owns a small software business, its principal pursuit is buying Bitcoin. In practice, MSTR is an investment company that buys and holds Bitcoin.2 MSTR trades at a large premium to the value of the underlying Bitcoin it holds. The idea is to raise money from new investors at a premium and use the proceeds to buy more Bitcoin. Since the Bitcoin that MSTR buys costs less than the Bitcoin-implied value of MSTR’s stock, the new investment is dilutive to new investors but accretive to existing investors. MSTR’s promoters have labeled the return to existing investors created by this scheme the “Bitcoin yield”. As Bitcoin itself yields nothing, the Bitcoin yield is simply a measure of the Ponzi finance’s effectiveness. Lately, it has been pretty effective.”
A software engineer wearing a headset, collaborating with a remote team on a project.
MicroStrategy Incorporated (NASDAQ:MSTR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held MicroStrategy Incorporated (NASDAQ:MSTR) at the end of the third quarter which was 26 in the previous quarter. While we acknowledge the potential of MicroStrategy Incorporated (NASDAQ:MSTR) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed MicroStrategy Incorporated (NASDAQ:MSTR) and shared the list of hot stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.