MicroStrategy stock reversed lower Monday despite a series of hefty price-target hikes as Michael Saylor's software company continues its bitcoin buying spree. Meanwhile, bitcoin retreated after nearly hitting $100,000 late last week.
Canaccord on Monday morning raised its price target on MicroStrategy stock to 510 from 300 and kept a buy rating on the shares, The Fly reported. The research firm noted that MicroStrategy is the best-performing stock across the Fortune 500 since implementing its bitcoin acquisition in the summer of 2020, with a 2,800% gain over the period. Canaccord said it introduced a new valuation framework for MicroStrategy, because the traditional earnings metrics no longer really apply to the company.
MicroStrategy's traditional software business now only accounts for a single-digit percentage of its current enterprise value, the analysts wrote. Meanwhile, MicroStrategy is using its equity and convertible debt while exploiting its equity premium, which allows its bitcoin holdings to outpace the dilution of its share count, Canaccord noted.
MicroStrategy announced in its Q3 results at the end of October plans to raise $42 billion to buy more bitcoin over the next three years. The company plans to raise $21 billion of equity and $21 billion of fixed income securities, called its "21/21 Plan."
As part of that plan, Chairman Michael Saylor said Monday that MicroStrategy acquired 55,500 bitcoin for around $5.4 billion, following another $4.6 billion purchase earlier in the month. As of Nov. 25, MicroStrategy holds 386,700 bitcoin with an average price of about $56,761 per coin.
Bernstein on Monday also hoisted its price target for MicroStrategy stock, calling its bitcoin treasury model unprecedented on Wall Street. MicroStrategy is on an "insatiable path" to attract billions in global capital to invest in bitcoin, Bernstein wrote, and expects it to own 4% of the world's bitcoin over the next decade. The firm raised its price target on MSTR stock to 600 from 290 and maintained an outperform rating on the shares.
Elsewhere, Barclays on Monday also raised its price target on MicroStrategy to 515 from 275 and kept an overweight rating on the shares after updating the company model.
MicroStrategy Stock And Bitcoin Price Action
MSTR stock popped to 440.75 soon after the open on the upgrades, but reversed to trade down 4.4% to close at 403.35. Shares rallied nearly 24% last week as bitcoin trended higher, but reversed sharply lower from Thursday's peak of 543.
MicroStrategy stock has vaulted 539% so far this year.
Meanwhile, bitcoin traded below $94,900 Monday afternoon as it backs off near the coveted $100,000 price level. Bitcoin on Friday peaked at a record high of $99,768 before sliding below $96,000 on Sunday.
The world's top cryptocurrency has more than doubled in 2024, with a huge run since Election Day.
Among other crypto stocks, Coinbase rebounded to a 2.5% gain after falling more than 4% in early trade.
The iShares Bitcoin Trust and other spot bitcoin ETFs sank 4.4%, dipping from record highs after last week's rally.
Bitcoin miners slid lower Monday. MARA Holdings was the exception, rebounding from an early drop for a 1.5% gain.
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