Funding agency Kerrisdale Capital has launched a report suggesting that MicroStrategy’s shares are overvalued, arguing that they commerce at a premium in comparison with the underlying worth of Bitcoin. Kerrisdale Capital, which holds a brief place on MicroStrategy shares and is lengthy on bitcoin by way of BlackRock and Constancy’s spot bitcoin ETFs, highlighted the numerous surge in MicroStrategy’s inventory worth amidst the latest rise in bitcoin’s worth.
Kerrisdale Capital emphasised that whereas MicroStrategy’s shares have skilled outstanding development, they imagine the valuation is disproportionate to the precise worth of the corporate’s Bitcoin holdings. The funding agency disclosed its quick positions in MicroStrategy inventory and expressed the potential for beneficial properties if the inventory worth declines. Regardless of reaching a brand new all-time excessive earlier within the week, MicroStrategy didn’t reply to requests for remark.
The panorama of funding choices associated to Bitcoin has advanced considerably, based on Kerrisdale Capital. The provision of varied monetary devices, together with spot bitcoin ETFs supplied by main establishments like BlackRock and Constancy, has offered buyers with alternative routes to realize publicity to bitcoin. Kerrisdale Capital famous that this accessibility has diminished the individuality of MicroStrategy shares as a automobile for Bitcoin funding.
In distinction, MicroStrategy has persistently pursued its technique of amassing Bitcoin, at present proudly owning roughly 214,250 bitcoins, equal to roughly 1% of the entire provide of the cryptocurrency. Regardless of this vital bitcoin reserve, Kerrisdale Capital identified that MicroStrategy’s market capitalization has ballooned to almost $32 billion, far exceeding the worth of its bitcoin holdings.
Kerrisdale Capital disclosed its lengthy positions in each BlackRock and Constancy’s spot bitcoin ETFs, indicating its confidence in these different funding automobiles in comparison with MicroStrategy inventory.
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