MicroStrategy (MSTR) Stock Soars as Bitcoin Treasury Strategy Continues to Outperform Equities and Bitcoin

MicroStrategy (MSTR), the software company founded by Michael Saylor, remains one of the best ways that equity investors can gain exposure to bitcoin (BTC)

Software company MicroStrategy (MSTR), founded by Michael Saylor, is still one of the best ways for equity investors to get exposure to bitcoin (BTC), thanks to the company’s intelligent leverage strategy, broker Canaccord said in a research report on Thursday.

The broker raised its MicroStrategy price target to $300 from $173, keeping its buy rating. Notably, the stock rose 0.4% to $245.50 in early trading Friday.

“If any business model is truly judged by the stock price, then MSTR is hard to beat in our view,” wrote analysts led by Joseph Vafi. The firm has outperformed both equities and bitcoin since it began acquiring bitcoin in 2020.

MicroStrategy also recently announced its financial results for the three-month period ending September 30, 2024.

“Our focus continues to be on maximizing value generation for our shareholders by leveraging the digital transformation of capital. Today, we are announcing a strategic goal of raising $42 billion in capital over the next 3 years, consisting of $21 billion in equity and $21 billion in fixed-income securities, which we refer to as our “21/21 Plan.”

As a Bitcoin Treasury Company, we intend to use the additional capital to further acquire bitcoin for our treasury reserve asset in a manner that will enable us to generate a higher BTC Yield,” said Phong Le, President and Chief Executive Officer of MicroStrategy.

The authors also noted that MicroStrategy’s leverage strategy “could lead to additional premium to spot re-emerging in MSTR shares.”

Benchmark analyst Mark Palmer recently followed and lifted the price target for MicroStrategy stock to $300 from $245

“If there were any doubts that MicroStrategy (MSTR) would lean into its bitcoin acquisition strategy in a rising bitcoin market, they were erased” by the Oct. 30 announcement, Benchmark fintech analyst Mark Palmer told Cointelegraph.

Palmer’s model assumes continued price appreciation for bitcoin, which he expects to hit $175,000 by the end of 2025.

“MSTR is entering this new, even more audacious phase in the execution of its strategy with an impressive track record over the past four-plus years,” Palmer said in the analyst report.

During its Aug. 1 earnings call, MicroStrategy doubled down on BTC buying by committing to a unique performance metric: bitcoin yield.

Bitcoin yield measures the ratio of BTC holdings to outstanding shares and effectively sets BTC-per-share as a lodestar for corporate performance. “While many investors have been focused on MSTR’s market capitalization relative to its [net asset value], we believe a more valuable metric for assessing the company’s value is its BTC yield,” Palmer said.

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