Susquehanna International Group has recently created quite a buzz. They have made the largest single investment in MicroStrategy, now known as Strategy Inc., which operates on bitcoin bets. Furthermore, Strategy’s aggressive bitcoin acquisition strategy tied them to their volatility. Strategy lost $17 million in value last Tuesday amidst the fears of another wave of inflation; however, analysts are convinced that Strategy’s downfall is short-term—Nu Holdings and Coupang are considered long-term solid opportunities for around where Strategy’s valuation lies.
Strategic Investment in Bitcoin: Losing Approach
Recently, Strategy’s current market cap sits around $75 billion, up from $3 billion two years prior. This should raise some eyebrows because suddenly acquiring $121 million in revenue while Business Strategy Software is stagnating is quite unreasonable to expect. So what’s to show for this increase? All estimations put this alongside aggressive bitcoin stockpiling moves. Ever since 2020, the company has been absolutely throwing cash at bitcoin, with the latest count sitting at 506,137 and a purchase price of 33.7 billion.
Bitcoin’s current value stands at $44.1 billion, which accounts for more than half of Strategy‘s current market cap. The company’s all-in approach is also evinced in the “21/21” plan, which entails selling an additional $21 billion of equity and $21 billion of fixed-income securities to finance even more Bitcoin purchases by 2027.
While there’s potential for great returns, this all-or-nothing gamble poses a myriad of challenges. If the price stagnates or drops, there’s a good chance Strategy’s stock will suffer bottom-line losses, especially considering the dilution and debt load.
Nu Holdings: A Dominating Force of Fintech in South America
Based in Brazil and expanding into Mexico and Colombia, Nu Holdings is now regarded as the biggest digital bank in Latin America. Additionally, their customer base increased remarkably from 33.3 million in 2021 to 114.2 million in 2024. There was also an increase in the company’s activity rate from 76% to 83% during the same time period.
Two primary factors can account for this surging growth. To start, it is unprecedented in the region for a fully digital institution to expand its footprint as rapidly as traditional competitors. And second, increased access to the Internet along with rising income levels in the region have shifted a large population of non-bank users onto its platform.
Regardless of such growth, the World Bank projects that more than 70% of adults in Latin America are still unbanked. This suggests that Nu has ample opportunity to acquire customers considering that they already have an ecosystem with checking accounts, credit cards, loans, insurance, investment products, cryptocurrency services, e-commerce, and business tools. Besides, Nu is augmenting its offerings by integrating AI technologies into its analytics, chatbots, and cyber security systems.
Analysts expect strong growth for Nu, projecting a 32% CAGR in revenue and 40% in earnings per share (EPS) from 2024 to 2027. Nevertheless, the company’s current market cap of $53 billion seems low when compared to their sales projection for this year, currently $15 billion, since they are only 3.6 times their projected sales.
Concerns regarding the inflationary dynamics in Latin America, along with the possible effects of U.S. tariffs on the region’s economies, are likely the rationale behind this comparison-based valuation. Should these economic headwinds ease, the valuation for Nu could appreciate considerably. Estimates indicate that if Nu achieves 5x sales in early 2027, its market capitalization may reach $131.5 billion, while a more optimistic scenario that prices Nu at 10x sales may catapult its market cap to $263 billion.
Coupang: Dominating E-commerce in South Korea
Headquartered in Seattle, Coupang operates the largest e-commerce platform in South Korea. The firm has shown considerable growth, increasing its customer count from 14.9 million at the end of 2020 to a projected 22.8 million by the end of 2024. Coupang also diversified their product offerings by purchasing the luxury goods retailer Farfetch online last year.
Coupang’s propagation in the South Korean market is supported by the competitively unrivaled first-party fulfillment network. This patronizes their congestion-free access and unrivaled delivery time, especially due to the fact that 70% of the population is within seven miles of a fulfillment center. This structure supports simultaneous delivery and order processing. Some of the most strategic solutions the company offers that support boosting unemployment of its third-party marketplace are a prime-subscription-like offer called Rocket Wow and features like free returns, video streaming, and grocery deliveries, among others.
In anticipation of growth, Coupang aims to branch out of South Korea, which is why they’ve extended their marketplace to Taiwan, extended the Coupang Eats service, and introduced added Wow features to aid customer retention. Alongside this, the company’s far-reaching visions also include still maintaining loss-leadership strategies by focusing on broadening profit through a third-party marketplace, integrating luxury goods with higher margins from Farfetch, automating processes, and refining the supply chain systems, all while focusing on profitability.
At the same time, analysts expect these changes: revenue growth for Coupang at 14% and a compounding 54% for adjusted EBITDA, estimated growth of amortization. For a market cap of $42.6 billion, all they are trading at right now is 1.2 of this year’s sales, which puts Coupang’s valuation at annoyingly low values.
But these statistics suggest that Cutamp has set their sights too low. The estimated value is most likely impacted by the foes bothering the economy of South Korea and resisting any progress to political changes, borderline estimating tariffs on free trade, and the boost to the US dollar needed.
Should Coupang tackle these challenges optimistically and meet the analysts’ growth projections, along with increasing their valuation to three times the forward sales (like Amazon), their market capitalization could reach $133.8 billion by early 2027.
The Verdict: Nu and Coupang Considered Alternatives
The strategy’s risk stems from its reliance on Bitcoin’s price trajectory, which, if underwhelming, could lead Strategy’s stock to stagnate. Unlike these, Nu Holdings and Coupang are actively growing firms with robust frameworks that are bound to outperform their competitors. If these firms increase in value according to their growth potential, they can surpass Strategy’s market capitalization within two years and provide lower volatile investment options.
