Bernstein analysts set a $290 price target on MicroStrategy’s MSTR stock, representing a potential 64% upside, based on the company’s aggressive Bitcoin acquisition strategy, according to a new report. It is said to be equivalent to
What Happened: MicroStrategy, led by Executive Chairman Michael Saylor, has amassed roughly $16 billion worth of Bitcoin BTC/USD holdings, making it one of the top 10 holders of the cryptocurrency.
Bernstein analysts Gautam Chughani, Mahika Sapra, and Sanskar Chindariya praised Saylor’s approach, saying, “Michael Saylor pioneered the Bitcoin financial model for businesses.” DL News reported on Monday.
The analysts’ optimistic outlook is rooted in the assumption that Bitcoin will reach $1 million by 2033 and that MicroStrategy will continue to buy the cryptocurrency. This bullish sentiment is in line with the overall market enthusiasm for Bitcoin, which has increased in value by nearly 50% this year.
MicroStrategy’s Bitcoin strategy was launched in 2020 through a series of convertible note sales and has so far proven successful. “Since adopting the Bitcoin strategy in August 2020, MSTR stock has increased (approximately) 13x, outperforming Bitcoin, Gold, S&P, Nasdaq, and Small Cap Software,” the analysts wrote. he pointed out.
Also read: Satoshi Nakamoto’s pseudonym is ‘one of the coolest things ever’, human rights activist says – can HBO documentary solve the mystery?
Why it matters: This strategy is not without risks. Bernstein said Bitcoin could reach $200,000 by the end of next year and then stagnate, forcing MicroStrategy to sell its holdings to repay shareholders and risk financial collapse. He emphasized scenarios in which people could be exposed to.
Despite these risks, MicroStrategy’s market capitalization has soared to more than $35 billion, on par with many S&P 500 companies. However, the company’s current unprofitability (reporting a net loss of $102 million in Q2 2024) makes S&P 500 inclusion unlikely in the short term.
Read next:
Photo: Shutterstock
This content is created in part using AI tools, and reviewed and published by Benzinga editors.
Market news and data powered by Benzinga API
© 2024 Benzinga.com. Benzinga does not provide investment advice. Unauthorized reproduction is prohibited.
