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MicroStrategy’s share value, which is principally pushed by its Bitcoin (BTC) holdings, is “exceptionally excessive“ and “unjustifiable,” argues funding agency Kerrisdale Capital.
Traders have inflated MicroStrategy’s premium on account of the corporate’s BTC holdings. The vast majority of this BTC was purchased via debt financings, fairness linked convertible notes and ATM fairness choices, mentioned the agency in a Mar. 28 analyst be aware.
Calling the corporate’s use of leverage to buy extra BTC “clever” is flawed logic, it added.
Bitcoin ETFs Might Make MicroStrategy Redundant
The launch of Spot Bitcoin ETFs (exchange-traded funds) within the U.S. may scale back the necessity for traders to commerce MicroStrategy shares to achieve publicity to Bitcoin, the agency added.
MicroStrategy (MSTR) now not presents traders with “a uncommon, distinctive method to achieve entry to Bitcoin,” it mentioned within the be aware.
Kerrisdale Capital mentioned that MicroStrategy’s “sleepy software program analytics enterprise” solely makes up 3% of the corporate’s collective worth. Different causes that argue in favor of MSTR’s worth, similar to the power to purchase extra BTC utilizing the software program firm’s money flows, its entry to liquidity, the shortage of administration charges and the way straightforward it’s to commerce MSTR are all “weak,” the be aware added. Analysts on the funding agency subsequently mentioned they “ are quick shares of MicroStrategy.”
Michael Saylor Maintains A Optimistic Outlook For The Firm
Michael Saylor, the CEO at MicroStrategy, has regularly expressed his confidence within the firm’s capability to stay enticing to traders. One factor that offers MicroStrategy an edge over spot Bitcoin ETFs, aside from not charging charges, is the leverage it gives traders, Saylor mentioned in a December interview with Bloomberg TV.
#Bitcoin is Higher. pic.twitter.com/UkZR7t6UEP
— Michael Saylor⚡️ (@saylor) March 28, 2024
Extra not too long ago, the CEO additionally revealed that the corporate will likely be rebranded as a “Bitcoin growth firm.” He known as this a “pure choice,” in a Feb. 12 interview with CNBC, given the success of MicroStrategy’s Bitcoin funding.
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