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MicroStrategy is “building the largest bitcoin company in the world,” Bernstein says
According to Bernstein, MicroStrategy can gain another 80% from here thanks to its aggressive bitcoin buying strategy. The Wall Street firm initiated research coverage on MicroStrategy Thursday before the market opened with an outperform rating and a $2,890 price target. That implies an upside of another 80% based on the stock’s Wednesday close of $1,603.67. As trading began on Friday, MicroStrategy was already up 138% year to date, more than double Bitcoin’s roughly 57% advance over the same period. “Since August 2020, MSTR has transformed from a small software company into the largest bitcoin holding company, owning 1.1% of the world’s Bitcoin supply worth approximately $14.5 billion,” he said in Bernstein analyst Gautam Chhugani notes. “MSTR’s founding president, 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 began as an enterprise software provider, began using an aggressive bitcoin-buying strategy in 2020 and has since traded primarily as a proxy for the cryptocurrency’s price. This February, the company said it would shift its focus and brand to bitcoin development. “MSTR is positioned as an actively leveraged bitcoin strategy versus passive spot ETFs,” Chhugani said. “Over the past four years, MSTR’s active strategy has produced higher bitcoin per stock share. … On a dollar basis, MSTR’s dollar NAV per share has grown approximately 4x, beating the growth of approximately 2.4 times the spot price of bitcoin.” He noted that bitcoin per share is up 67%, from 6 BTC per diluted share in the fourth quarter of 2020 to around 10 BTC per MicroStrategy 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, an upside of about 80%, was based on MicroStrategy’s Wednesday closing price of $1,603.67. A previous version provided an incorrect daily closing price.