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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.
Buyers have inflated MicroStrategy’s premium because of the corporate’s BTC holdings. Nearly all of this BTC was purchased via debt financings, fairness linked convertible notes and ATM fairness choices, stated the agency in a Mar. 28 analyst observe.
Calling the corporate’s use of leverage to buy extra BTC “clever” is flawed logic, it added.
Bitcoin ETFs May Make MicroStrategy Redundant
The launch of Spot Bitcoin ETFs (exchange-traded funds) within the U.S. may cut back the necessity for traders to commerce MicroStrategy shares to achieve publicity to Bitcoin, the agency added.
MicroStrategy (MSTR) not presents traders with “a uncommon, distinctive method to achieve entry to Bitcoin,” it stated within the observe.
Kerrisdale Capital stated 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, akin 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 simple it’s to commerce MSTR are all “weak,” the observe added. Analysts on the funding agency due to this fact stated they “ are brief 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 capacity to stay engaging to traders. One factor that provides MicroStrategy an edge over spot Bitcoin ETFs, other than not charging charges, is the leverage it provides traders, Saylor stated in a December interview with Bloomberg TV.
#Bitcoin is Higher. pic.twitter.com/UkZR7t6UEP
— Michael Saylor⚡️ (@saylor) March 28, 2024
Extra just lately, the CEO additionally revealed that the corporate can be rebranded as a “Bitcoin growth firm.” He known as this a “pure determination,” in a Feb. 12 interview with CNBC, given the success of MicroStrategy’s Bitcoin funding.
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