TLDR
- MicroStrategy bought 4,000 Bitcoin for $450 million, bringing total holdings to 636,500 BTC worth $70.6 billion
- Company removed 2.5x premium restriction on common stock issuance for more flexibility
- TD Cowen and Benchmark analysts maintain Buy ratings despite 7% monthly stock decline
- S&P 500 inclusion decision expected this week could drive billions in passive investment
- Wall Street consensus shows Strong Buy with average price target indicating 61% upside
MicroStrategy recently expanded its Bitcoin treasury with a $450 million purchase of 4,000 Bitcoin. The move brings the company’s total holdings to 636,500 Bitcoin valued at $70.6 billion.
The purchase was funded through equity offerings. MicroStrategy raised $425 million from common stock sales and $46.5 million from preferred shares.
The company’s stock has faced headwinds recently. Shares declined about 7% over the past month, trading around $346 compared to November highs of $543.
MicroStrategy made a key operational change by relaxing its self-imposed restriction. The company previously avoided issuing common stock when trading below a 2.5x premium to Bitcoin holdings.
The revised policy allows common share issuance “when otherwise deemed advantageous.” This provides more flexibility for future Bitcoin acquisitions.
Wall Street Maintains Confidence
Top analysts continue supporting MicroStrategy despite recent weakness. TD Cowen’s Lance Vitanza maintains a Buy rating while expecting better performance ahead.
Vitanza noted increased activity with Strategy purchasing an additional 430 bitcoins for $51.4 million. These acquisitions were funded through preferred stock offerings that continue trading well.
Benchmark analyst Mark Palmer reaffirmed his Buy rating with a $705 price target. This suggests over 100% upside potential from current levels.
Palmer defended the company’s policy change as a “rational course-correction that restored flexibility.” He views the modification as consistent with past practices rather than a strategy shift.
S&P 500 Decision Looms
MicroStrategy now qualifies for S&P 500 inclusion with a decision expected this week. Entry into the index would drive billions in passive investment demand.
Crypto companies like Coinbase have already joined the index. However, MicroStrategy’s income derives almost entirely from Bitcoin price movements, which could influence the committee’s decision.
The company’s multiple-to-net asset value currently stands at 1.5x. This compares to peaks of 3.9x over the past year as the premium has compressed.
Analysts suggest the initial restriction became counterproductive by limiting access to cheap capital. The recent change returns MicroStrategy to its original opportunistic approach.
Wall Street maintains a Strong Buy consensus based on 12 Buy ratings, one Hold, and one Sell. The average price target of $549.43 indicates 61% upside from current trading levels.
MicroStrategy continues its Bitcoin accumulation strategy while positioning for potential major index inclusion that could reshape institutional ownership.
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