MicroStrategy Inc. is poised to transform the way capital is stored and transferred globally, according to a recent report from Bernstein Research, and the company's outspoken co-founder Michael Thaler said the company is It says it aims to become a “Bitcoin bank” with potentially trillions of dollars in holdings. dollar valuation.
Bernstein rates MicroStrategy “outperform” and has a price target of $290, reflecting a 39% upside from the current price of $209, according to Google Finance. The report states that MicroStrategy's significant investment in Bitcoin is the key driving force behind this optimistic forecast.
Under the leadership of Saylor, the company's executive chairman and former CEO, MicroStrategy gained attention for its large-scale Bitcoin acquisition strategy. Since 2020, the company has accumulated 252,200 Bitcoins, or the equivalent of $15.8 billion as of this writing, making it the largest publicly traded holder of the cryptocurrency.
At an event hosted by Bernstein this week, Saylor explained MicroStrategy's rationale for adopting Bitcoin.
“We thought of Bitcoin as a giant high-tech monetary network, like Google for money or Facebook for money,” he said.
MicroStrategy's broader vision is to evolve into a “Bitcoin bank,” creating capital markets products related to Bitcoin that it can offer to investors, Saylor said.
“We have a core business of creating Bitcoin capital markets products across stocks, convertibles, bonds and preferred stocks,” Saylor said. This approach aims to provide investors with exposure to Bitcoin price fluctuations while offering a variety of risk-adjusted products.
Through Bitcoin securitization, MicroStrategy was able to leverage financial instruments such as convertible bonds and equity to raise funds at low interest rates and use those funds to purchase more Bitcoin.
“We're recycling capital, investing in things that produce three times the cost of capital,” Thaler explained.
Bernstein's report highlights that MicroStrategy's innovative approach to Bitcoin securitization has established the company as a leader in the field. The company provides investors with a structured way to profit from Bitcoin's performance by creating Bitcoin-backed capital market products.
According to the report, MicroStrategy's strategy provides a competitive edge in the digital asset ecosystem. The company's ability to raise capital through debt and equity and reinvest it in Bitcoin has allowed it to take advantage of the growing acceptance of cryptocurrencies in traditional financial markets.
Saylor added: “We are a misunderstood company, similar to a real estate development company, but instead of buying real estate, we buy Bitcoin.”
Saylor remains so bullish on Bitcoin that he believes each coin will be worth millions of dollars in the future. That's why the company believes its current strategy can turn Bitcoin into a trillion-dollar company, he noted.
MicroStrategy's market capitalization is currently approximately $42.5 billion. Today, only a handful of companies around the world are valued at at least $1 trillion, including Apple, Microsoft, Amazon, and Nvidia.
Edited by Andrew Hayward
daily report meeting Newsletter
Start each day with the current top news stories, plus original features, podcasts, videos, and more.
