“Exceptionally High” MicroStrategy Share Price Is Driven By Debt-Financed BTC Holdings, Investment Firm Says

MicroStrategy’s share price, which is mainly driven by its Bitcoin (BTC) holdings, is “exceptionally high“ and “unjustifiable,” argues investment firm Kerrisdale Capital.

Investors have inflated MicroStrategy’s premium as a result of the company’s BTC holdings. The majority of this BTC was bought through debt financings, equity linked convertible notes and ATM equity offerings, said the firm in a Mar. 28 analyst note. 

Calling the company’s use of leverage to purchase more BTC “intelligent” is flawed logic, it added.

MicroStrategy 2020 Launches with New HyperIntelligence Functionality

Bitcoin ETFs Could Make MicroStrategy Redundant 

The launch of Spot Bitcoin ETFs (exchange-traded funds) in the U.S. might reduce the need for investors to trade MicroStrategy stocks to gain exposure to Bitcoin, the firm added.

MicroStrategy (MSTR) no longer presents investors with “a rare, unique way to gain access to Bitcoin,” it said in the note. 

Kerrisdale Capital said that MicroStrategy’s “sleepy software analytics business” only makes up 3% of the company’s collective value. Other reasons that argue in favor of MSTR’s value, such as the ability to buy more BTC using the software company’s cash flows, its access to liquidity, the lack of management fees and how easy it is to trade MSTR are all “weak,” the note added. Analysts at the investment firm therefore said they “ are short shares of MicroStrategy.” 

Michael Saylor Maintains A Positive Outlook For The Company

Michael Saylor, the CEO at MicroStrategy, has continually expressed his confidence in the company’s ability to remain attractive to investors. One thing that gives MicroStrategy an edge over spot Bitcoin ETFs, apart from not charging fees, is the leverage it offers investors, Saylor said in a December interview with Bloomberg TV.

More recently, the CEO also revealed that the company will be rebranded as a “Bitcoin development company.” He called this a “natural decision,” in a Feb. 12 interview with CNBC, given the success of MicroStrategy’s Bitcoin investment.

Related Articles:

  • Upcoming Crypto Presales: Unlock Early Investment Opportunities!
  • Best Bitcoin Casinos in 2024
  • Fetch.ai Price Prediction: FET Jumps 5% As This World-First AR/VR Presale Races Towards $3 Million

Comments

Post a Comment

Popular posts from this blog

Hedera (HBAR) Price Prediction 2025

Image
Join Our Telegram channel to stay up to date on breaking news coverage The price of Hedera (HBAR) will skyrocket in the near future. The main reason for this is the rapid development of the platform’s revenue. Hedera Hashgraph (HBAR) had extraordinary revenue growth due to its Consensus Service. The hedera system utilizes a hashgraph, with nodes exchanging information using a gossip protocol. This method seeks to improve the efficiency of blockchain processes. Brief overview of Hedera (HBAR) Hedera is a publicly distributed ledger and governing body that was started in 2018 by Leemon Baird, Mance Harmon, and Zenobia Godschalk. It was built from the ground up to serve both new and old applications running at a web scale. It uses distributed ledger technologies to build computational trust into its applications. This lets businesses and people who might not know each other or trust each other work together quickly and cheaply, even if they don’t know each other or trust each
Read more

Bitcoin price derivatives look a bit overheated, but data suggests bears are outnumbered

Image
Bullish BTC traders are using excessive leverage, but bears’ reluctance to fight back could extend the current Bitcoin price rally. Bitcoin (BTC) price rallied over 12% on Feb. 15, marking the highest daily close in more than six months. Curiously, the movement happened while gold reached a 40-day low at $1,826, indicating some potential shift in investors' risk assessment for cryptocurrencies. A stronger than expected U.S. inflation report on Feb. 14 presented 5.6% growth year-over-year, followed by data showing resilient consumer demand caused traders to rethink Bitcoin's scarcity value. U.S. retail sales increased by 3% in January versus the previous month — the highest gain in almost two years. On-chain data indicates that the recent gains can be traced back to a mysterious institutional investor that started buying on Feb. 10. According to Lookonchain's data, nearly $1.6 billion in funds have flowed into the crypto market between Feb. 10 and Feb. 15. The analysis sh
Read more

Just-In: Binance CEO Confirms Progress On Bitcoin Lightning Network

Image
Bitcoin Lightning Network On Binance The integration of the Bitcoin Lightning Network by exchange is underway with some technical works pending. They tweeted about the progress saying: advertisement Some eagle-eyed users spotted our new lightning nodes recently. Yes – that’s us! By leveraging the Lightning Network, Binance can enable faster and more scalable Bitcoin transactions, offering a smoother user experience. Update for full-integration by Binance is awaited . In a tweet by CZ, he expressed his exchange’s dedication to continuous growth. He stated, Recommended Articles Crypto Presale Projects For 2023 To Invest; Updated List Must Read Best Crypto Exchange Affiliate Programs In 2023 Must Read
Read more