Bitcoin
MicroStrategy ‘building the largest bitcoin company in the world,’ says Bernstein
MicroStrategy could trade another 80% from here thanks to its aggressive bitcoin purchasing strategy, according to Bernstein. The Wall Street firm initiated research coverage of MicroStrategy on Thursday before the market opened with an outperform rating and a $2,890 price target. That implies an appreciation of another 80% based on the stock’s Wednesday close of $1,603.67. At the start of Friday’s trading session, MicroStrategy was already up 138% year to date, more than double Bitcoin’s advance of around 57% in the same period. “Since August 2020, MSTR has grown from a small software company to the largest bitcoin holding company, owning 1.1% of the world’s Bitcoin supply worth approximately $14.5 billion,” said Gautam Chhugani, analyst at Bernstein, in a note. “MSTR’s founding chairman, Michael Saylor, has become synonymous with the bitcoin brand and has positioned MSTR as a leading bitcoin company by attracting large-scale capital (both debt and equity) for an active bitcoin acquisition strategy.” MicroStrategy, which launched as an enterprise software provider, began employing an aggressive bitcoin purchasing strategy in 2020 and has been trading primarily as a proxy for the cryptocurrency’s price since then. In February this year, the company said it would shift its focus and brand to bitcoin development. “MSTR positions itself as an ‘actively leveraged’ bitcoin strategy versus passive spot ETFs,” Chhugani said. “Over the past four years, MSTR’s active strategy has delivered higher bitcoin per share. … In dollars, MSTR’s Bitcoin $NAV per share has grown ~4x, outperforming the ~2.4x growth in spot price of bitcoin.” He noted that bitcoin per share has grown 67%, from 6 BTC per diluted share in Q4 2020 to around 10 BTC per MicroStrategy per share today. As part of the call, Bernstein raised his bitcoin price target to a “cycle high” of $200,000 in 2025 from a previous target of $150,000. – CNBC’s Michael Bloom contributed reporting. Correction: This article has been updated to reflect that Bernstein’s price target of $2,890, showing upside of about 80%, was based on MicroStrategy’s Wednesday closing price of $1,603.67. A previous version provided an incorrect day’s closing price.