The post Bitcoin Firm MicroStrategy’s Price Target Cut—Here’s Why appeared on BitcoinEthereumNews.com.

We do the research, you get the alpha! Get exclusive reports and access to key insights on airdrops, NFTs, and more! Subscribe now to Alpha Reports and up your game! Go to Alpha Reports Financial services firm Canaccord Genuity on Monday adjusted its target price for MicroStrategy (NASDAQ:MSTR), reducing it from $2,047 to $1,826, while maintaining its buy rating. Microstrategy stock is trading at $1,391 as of writing. The report observed that MicroStrategy has been actively enhancing its Bitcoin holdings, significantly impacting its stock valuation. In mid-June, the company successfully priced a $700 million convertible note, due in 2032, with a 2.25% annual interest rate and a conversion price of $2,032. This move follows two oversubscribed offerings in May, Canaccord noted, illustrating robust investor confidence.  Currently, MicroStrategy holds approximately 226,311 BTC, valued at around $14.5 billion. The company has strategically used its full capital structure, balancing equity and debt to fund its Bitcoin acquisitions. This approach has been accretive, Canaccord wrote, driving an equity value premium relative to its Bitcoin holdings. By the firm’s analysis, this premium currently stands at about 88%, despite recent fluctuations in Bitcoin’s spot price. The report notes that the approval of Bitcoin spot ETFs initially caused some market dislocation, reducing MicroStrategy’s premium to its Bitcoin holdings. However, the premium has rebounded, suggesting investor appreciation for the company’s strategic approach to Bitcoin accumulation.  The firm’s ability to maintain a premium despite increased competition from ETFs underscores its unique position in the market, Canaccord said. “We believe BTC is biased higher given recent approvals of US BTC spot ETFs coming from heavyweight asset managers and the very strong adoption there, combined with the recent BTC halving that has constrained supply,” wrote Canaccord Genuity analyst Joseph Vafi. “Our new price target is derived by assuming 20% one-year appreciation to…

---

Filed under: News - @ June 26, 2024 12:22 am