MicroStrategy (MSTR) Stock Price To Hit $300 Amid $42B Bitcoin Buying Plan

Canaccord raised its price target for MicroStrategy stock (MSTR) to $300 from $173, as it keeps a “Buy” rating on the stock. The firm noted that MicroStrategy announced a $21 billion ATM stock offering that management intends to utilize, along with selective fixed-income offerings, to fund up to $42 billion of Bitcoin purchases over the next three years.

Canaccord sounded quite confident in this approach, underlining that it fits well with it’s long-term strategy to take advantage of the appreciation in the value of Bitcoin.

MicroStrategy Stock a “Buy” – Canaccord

Canaccord recently upped the price target for MicroStrategy stock to $300 from $ 173 while leaving its “buy” rating on the stock intact. At the same time, shares were down 0.64% and trading at $242.94 on Friday.

Credit: Google Finance

MSTR, co-founded by Michael Saylor, became one of the better ways equity investors can get exposure to Bitcoin. Due to its strategic model of acquiring BTC, it has emerged as the favorite choice of investors who want to capitalize on price action in Bitcoin without actually buying the cryptocurrency.

If stock performance is any proxy for business model strength, then MSTR is one of the best in its class,” Canaccord analysts led by Joseph Vafi said. Since the company implemented its Bitcoin strategy in 2020, it has outperformed the broader stock market and Bitcoin, proving its leverage toward maximum shareholder returns when the cryptocurrency rises.

MicroStrategy Doubles Down on Bitcoin, Eyes $42B Investment

The company also recently announced that it will raise $21 billion through an at-the-market offering of its stock, some of which it will use to buy additional Bitcoin. The offering forms part of a general move the company is making to spend $42 billion over the next three years on buying Bitcoins- a pledge to an aggressive Bitcoin acquisition plan.

Canaccord analysts noted that such a leverage strategy for MicroStrategy allows the stock to maintain or even extend its premium over the Bitcoin spot price. That premium could again emerge as the company continues to commit leveraged investments into Bitcoin, adding an attractive differential for equity investors desiring indirect exposure to the Bitcoin price move through MSTR shares.

Vafi also keeps a more general optimistic outlook on Bitcoin. According to him, two factors are helping Bitcoin move upward: the recent authorization of spot Bitcoin ETFs in the US and the growing investor adoption of this asset class, combined with the supply squeeze caused by the Bitcoin halving event earlier this year. Vafi believes These forces joining will keep Bitcoin in a bullish environment, with appreciation continuing to be fired by demand from ETFs and further accentuated by supply scarcity.

Analyst: MSTR’s Bitcoin Bet is Paying Off

Benchmark analyst Mark Palmer recently also followed and lifted the price target for MicroStrategy stock to $300 from $245. The stock was trading at $248 as of 2 pm ET Thursday, up 0.4% on the day. The company’s aggressive Bitcoin buying program kicked off in August 2020, and it has seen the company commit $9.9 billion through capital markets and cash flow to amass its hoard of Bitcoins.

Now, MicroStrategy plans to raise $10 billion in 2025, $14 billion in 2026, and $18 billion in 2027, a phase Palmer describes as “even more audacious.” He emphasizes the strategy’s success, with MSTR’s stock up about 1,700% since adopting Bitcoin as its reserve asset.

Year-to-date, MSTR extends its lead over Bitcoin, with the stock price up 257% while Bitcoin is up 59%. However, Palmer points out that, when it comes to the valuation of MicroStrategy stock, a more relevant metric than taking its market cap against net asset value is its “BTC yield,” meaning the change in the ratio between its Bitcoin holdings and fully diluted share count. For the year, the company’s BTC yield is currently at 17.8% versus 43.3%, but well above last year’s 7.3%.

Under the 21/21 plan, MSTR executives have revised their target for BTC yield for the next three years from an initial estimate of 4-8% to a range of 6-10%. This reveals growing confidence in the strategy while continuing to pursue aggressive Bitcoin accumulation in the name of shareholder value.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.