MicroStrategy Stock Leaps Pre-Market After Analyst Cheers ‘Insatiable’ Bitcoin Play, But Retail Stays Cautious
By Stocktwits Inc | First Published Nov 25, 2024, 7:03 PM ISTBernstein noted that MicroStrategy owns approximately 1.7% of the global Bitcoin supply, and expects it to grow to 4% by 2033.
Shares of MicroStrategy Inc. ($MSTR) surged over 5% pre-market on Monday, extending last week’s rally where the stock gained 22%, after some analysts issued bullish notes and the company ramped up its crypto-levered strategy.
The enterprise software company, now synonymous with its aggressive Bitcoin ($BTC.X)strategy, continues to ride the wave of a crypto bull market as Bitcoin edges closer to its all-time high of $100,000.
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Some Wall Street analysts are increasingly bullish on MicroStrategy’s Bitcoin play.
Bernstein’s Gautam Chhugani on Monday reportedly more than doubled his price target to $600 from $290, reflecting a potential upside of over 42% from Friday’s close.
Chhugani cited a “structural bull market” for Bitcoin, supported by favorable U.S. regulations, institutional adoption, and macroeconomic factors like low interest rates, inflation concerns, and record fiscal debt.
Highlighting the company’s treasury model as “unprecedented,” he noted that MicroStrategy owns approximately 1.7% of the global Bitcoin supply, and expects it to grow to 4% by 2033.
He said the company was "on an insatiable path to attract billions in global capital to invest in Bitcoin."
Other firms echoed the optimism. Barclays raised its price target to $515 from $275, maintaining an ‘Overweight’ rating.
Canaccord, which lifted its target to $510 from $300, praised MicroStrategy as the best-performing Fortune 500 stock since its Bitcoin acquisition strategy began in mid-2020, with a 2,800% return over the period.
Canaccord said its new valuation framework dismisses traditional earnings metrics, given that the company’s software business now accounts for less than 10% of its enterprise value.
Analysts commended the firm’s ability to leverage equity and convertible debt to scale Bitcoin holdings faster than share dilution impacts investors.
MicroStrategy ramped up its bitcoin acquisition last week, buying $5.4 billion worth of the cryptocurrency through a $3 billion convertible debt issue and $2.46 billion in equity sales. According to an 8-K filing on Monday, the company added 55,500 bitcoin between Nov. 18 and Nov. 24 — its largest purchase to date —boosting its total holdings to approximately 386,700 bitcoin.
Despite strong institutional confidence, retail investors remain measured. On Stocktwits, sentiment for MSTR remained ‘neutral’ before the bell on Monday, though it showed slight improvement compared to the previous day.
Retail following for the stock on the platform has grown by nearly 15% over the past week, with message volume skyrocketing by 490%, signaling heightened interest.
MicroStrategy’s stock has soared nearly 100% since Donald Trump’s presidential win on Nov. 5. Bitcoin has also gained around 40% in the same period, on hopes of easing U.S. crypto regulations.
For now, institutional backing and Bitcoin’s rally seem to be driving MicroStrategy’s remarkable run, though retail investors appear to be watching cautiously from the sidelines.
Editor's note: This story has been updated to reflect MicroStrategy's latest bitcoin buy, which was disclosed in a Monday filing.<
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