BTIG raised its Microstrategy price target from $780 to $1,800.
The broker said the company has more exposure to bitcoin per share.
The software company stands to benefit from Bitcoin catalysts such as the halving event, according to the report.
MicroStrategy has a proven track record of creating shareholder value, brokerage BTIG said in a research report on Friday, raising its price target for the software company and Bitcoin acquirer {{BTC}}. BTIG reiterated its Buy rating on the stock and increased its price target from $780 to $1,800. MicroStrategy shares were trading thin on the day, at around $1,617 at press time. The stocks’ outsized gains, up 155% year-to-date, were driven by Bitcoin’s 50% rise, accretive capital raises and because the implied premium of MicroStrategy’s BTC holdings rose to ‘more than twice compared to around 1.5 times during the year. last year, analysts Andrew Harte and Thomas Smith wrote. Investors have shown support for a higher implied Bitcoin premium in a sum-of-the-parts valuation (SOTP) analysis of the company, the report said, noting that while this premium is high relative to historical levels, “ investors demonstrated a willingness to pay the premium.
“The premium is supported by the desire of investors for exposure to bitcoin who may not be able to invest directly in bitcoin or exchange-traded funds (ETFs), and also supported by MSTR’s ability to “raise capital accretively to purchase additional bitcoin for shareholders,” the authors wrote. Due to the company’s activity in financial markets, it now has more exposure to bitcoin per share, the report notes. MicroStrategy stands to benefit from Bitcoin catalysts in the coming year, such as the upcoming halving event, which is expected to take place later this month, BTIG said. cheapest quadrennialThis is when miner rewards are reduced by 50%, reducing the growth rate of the bitcoin supply. The actions of the software publisher fell up to 14% Last Thursday, after prominent short seller Kerrisdale Capital said in a report that it was shorting the stock while going long on bitcoin. The Kerrisdale report notes that the bitcoin price currently implied by MicroStrategy’s stock price is $177,000, or two and a half times the cryptocurrency’s spot price. None of the reasons given to explain the relative attractiveness of the title “justify paying more than double for the same coin,” the report adds. Kerrisdale isn’t the only stock investor shorting MicroStrategy stock. Total short interest in crypto stocks stands at $10.7 billion, with MicroStrategy and Coinbase (COIN) accounting for 84% of the bearish bets, according to a recent report from S3 Partners. Learn more: Crypto Stocks Like MicroStrategy, Coinbase Could Rise If Short Sellers Pull Out
