“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.

Buyers have inflated MicroStrategy’s premium because of the corporate’s BTC holdings. Nearly all of this BTC was purchased by means of debt financings, fairness linked convertible notes and ATM fairness choices, mentioned the agency in a Mar. 28 analyst observe. 

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

Bitcoin ETFs Might 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 strategy to achieve entry to Bitcoin,” it mentioned within the observe. 

Kerrisdale Capital mentioned 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, resembling the flexibility to purchase extra BTC utilizing the software program firm’s money flows, its entry to liquidity, the shortage of administration charges and the way straightforward it’s to commerce MSTR are all “weak,” the observe added. Analysts on the funding agency due to this fact mentioned they “ are quick shares of MicroStrategy.” 

Michael Saylor Maintains A Optimistic Outlook For The Firm

Michael Saylor, the CEO at MicroStrategy, has regularly expressed his confidence within the firm’s capability to stay enticing to traders. One factor that provides MicroStrategy an edge over spot Bitcoin ETFs, other than not charging charges, is the leverage it affords traders, Saylor mentioned 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 will likely be rebranded as a “Bitcoin growth firm.” He known 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