MicroStrategy shares soared 6% to more than $230 on Thursday, hitting a nearly 25-year high for the world's largest corporate holder's first gain in six weeks. Bitcoin continued.
Less than two months ago, MicroStrategy's stock was valued at $118 and was trending lower as Bitcoin hovered around $56,000 on September 6th. The digital asset's price has since risen 20% to $67,600, while MicroStrategy's stock price has soared by comparison, nearly doubling. That period.
MicroStrategy has shed its label as an enterprise software company and positioned itself as a Bitcoin development company.
Earlier this month, Michael Saylor, co-founder and executive chairman of MicroStrategy, said the effortbitcoin bankHe described it as creating “Bitcoin capital market instruments across stocks, convertibles, bonds, and preferred stocks.” The company also previously revealed plans to create a decentralized identity protocol on top of Bitcoin.
The company's holdings of 252,220 Bitcoins are currently valued at $17 billion, representing more than 1% of all Bitcoins that will be mined in the future. MicroStrategy's strategy for acquiring Bitcoin has changed significantly since it first put Bitcoin on its balance sheet in 2020.
MicroStrategy has leveraged equity and debt to purchase more Bitcoin than it could have purchased otherwise. This year, convertible banknoteswhich can later be converted into shares by the buyer and issued. capital Through the at-the-money offering program.
Bernstein, an asset management firm that offers leveraged exposure to Bitcoin, rated the company an “outperform” in a report this week with a price target of $290.
Bernstein analysts said: “We believe investors should view MicroStrategy as an aggressively leveraged Bitcoin equity strategy.” “We actively switch between equity and long-term convertible debt to provide leveraged exposure to Bitcoin while maintaining modest leverage.”
Spot Bitcoin ETF has been over $20 billion With significant inflows this year, MicroStrategy's Bitcoin adoption predates the January launch. And Saylor recently said he sees the company as playing an important role as a bridge between traditional finance and digital assets.
“If we didn't exist, billions of dollars from traditional financial markets wouldn't be invested in Bitcoin,” he said. Bitcoin. ”
In addition to the recent rise in MicroStrategy's stock price, the company's valuation has increased relative to its Bitcoin holdings, as reflected as a premium to net asset value (NAV). As of Thursday, that premium had reached 2.7x, the highest level since February 2021. MSTR Tracker.
Bernstein analysts wrote that MicroStrategy's gains “build ground” to justify its premium, with the stock up 426% over the past year. Among the factors driving MicroStrategy's premium, the asset manager points to its proven ability to increase Bitcoin holdings per share and the limited number of comparable investment vehicles that offer leveraged exposure. did.
At the same time, MicroStrategy has some vocal critics, including Bitcoin skeptic and economist Peter Schiff. He claimed on Twitter (also known as X) on Tuesday that MicroStrategy's valuation and the merits of its Bitcoin strategy will eventually change direction.
“MSTR has to be the most overvalued stock in the MSCI World Index,” he said. I wrote. “When it finally collapses, it will be a real disaster.”
Edited by Andrew Hayward
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