MicroStrategy (MSTR) is selling convertible — now raising its projected sale to $700 million worth of notes — to fund the purchase of more bitcoin (BTC-USD). The Market Domination team analyzes MicroStrategy’s stock price in relation to the value of its own bitcoin holdings.
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This post was written by Luke Carberry Mogan.
Video Transcript
Let’s check in on some more trending tickers start with micro strategy shares, jumping company.
Now see it’s raising $500 million in a bond sale in an effort to buy more Bitcoin.
So this one Julie, um let’s keep it simple.
Basically, they, they boost their convertible note offering by about 40%.
And company says they’re gonna use the proceeds to, you guessed it buy more Bitcoin.
Of course, Michael Saylor, co founder and chairman here start buying Bitcoin in 2020 has become certainly one of the better Bitcoin bulls out there and it is up about 600% since Mrs first started piling in here.
Yeah.
And do you know micro strategy now owns about 1% of all of the Bitcoin that’s ever been created, which is amazing.
At the same time, we’ve got Gautam Chaan over Bernstein initiating coverage of micro strategy.
Um and he’s positive on the stock but not just positive on the stock.
His price target is $2890 which would be about 80% higher than it is right now.
And it’s so interesting micro strategy is quite controversial to be clear right.
There are folks who shorted the stock, there are people who have criticized the premium at which it trades to Bitcoin.
If you look at how micro strategy has done this this year versus how Bitcoin has done this year, it’s up a lot more and it holds a heck of a lot of Bitcoin on its balance sheet because as you see there, almost all of the cash it has is in Bitcoin compared with other companies that you think of as being pro Bitcoin like a Tesla or a block.
All this is something that Choi likes and thinks that their leverage strategy is a good way for people to kind of get in on Bitcoin.
And by the way, you mentioned the team at Bernstein initial coverage here, they gave you some Bitcoin targets as well.
You see that in the note, they revise up our Bitcoin price expectation and now up to 200,000, they say cycle high by 2025 led, they told their clients by unprecedented Bitcoin demand via those shiny new ETF S and Bitcoin supply being constructed.
What’s interesting to me is one of Jane’s um the reasons he’s bullish on micro strategy is he says investors are willing to pay a premium in view of scarcity of Bitcoin corporate investment vehicles.
Now there is that scarcity of corporate investment vehicles, but to your point, there is now no shortage of ETF investment.
So the whole argument for a premium because of micro strategy being this rare, leveraged way to play Bitcoin or rare even way to get access to Bitcoin without buying it directly.
That has gone away a little bit, a little bit of a hit.
Yeah.
So we’ll see if that keeps up.
That premium continues to widen.
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