“Exceptionally High” MicroStrategy Share Price Is Driven By Debt-Financed BTC Holdings, Investment Firm Says

MicroStrategy’s share worth, which is principally pushed by its Bitcoin (BTC) holdings, is “exceptionally excessive“ and “unjustifiable,” argues funding agency Kerrisdale Capital.

Traders have inflated MicroStrategy’s premium on account of the corporate’s BTC holdings. Nearly all of this BTC was purchased via debt financings, fairness linked convertible notes and ATM fairness choices, stated the agency in a Mar. 28 analyst be aware. 

Calling the corporate’s use of leverage to buy extra BTC “clever” is flawed logic, it added.

Bitcoin ETFs May Make MicroStrategy Redundant 

The launch of Spot Bitcoin ETFs (exchange-traded funds) within the U.S. would possibly scale back the necessity for traders to commerce MicroStrategy shares to achieve publicity to Bitcoin, the agency added.

MicroStrategy (MSTR) now not presents traders with “a uncommon, distinctive technique to acquire entry to Bitcoin,” it stated within the be aware. 

Kerrisdale Capital stated that MicroStrategy’s “sleepy software program analytics enterprise” solely makes up 3% of the corporate’s collective worth. Different causes that argue in favor of MSTR’s worth, equivalent to the power to purchase extra BTC utilizing the software program firm’s money flows, its entry to liquidity, the dearth of administration charges and the way straightforward it’s to commerce MSTR are all “weak,” the be aware added. Analysts on the funding agency due to this fact stated they “ are quick shares of MicroStrategy.” 

Michael Saylor Maintains A Constructive Outlook For The Firm

Michael Saylor, the CEO at MicroStrategy, has regularly expressed his confidence within the firm’s means to stay enticing to traders. One factor that offers MicroStrategy an edge over spot Bitcoin ETFs, other than not charging charges, is the leverage it provides traders, Saylor stated in a December interview with Bloomberg TV.

#Bitcoin is Higher. pic.twitter.com/UkZR7t6UEP

— Michael Saylor⚡️ (@saylor) March 28, 2024

Extra lately, the CEO additionally revealed that the corporate might be rebranded as a “Bitcoin growth firm.” He referred to as this a “pure choice,” in a Feb. 12 interview with CNBC, given the success of MicroStrategy’s Bitcoin funding.

Associated Articles:

Smog (SMOG) – Meme Coin With Rewards

Airdrop Season One Stay Now
Earn XP To Qualify For A Share Of $1 Million
Featured On Cointelegraph
Staking Rewards – 42% APY
10% OTC Low cost – smogtoken.com