Strategy Plans $84 Billion Bitcoin Acquisition, Supported by Wall Street Analysts
Wall Street analysts support Strategy's (MSTR) enhanced bitcoin (BTC) acquisition strategy, following its announcement to double capital-raising goals.
- Benchmark's Mark Palmer maintains a buy rating with a $650 price target, citing MSTR's first-mover advantage.
- MSTR currently trades at over twice the value of its bitcoin holdings, deemed attractive due to management's track record in enhancing shareholder value.
- The company plans to raise a total of $84 billion via stock and debt issuance, expanding from its original 21/21 plan.
- TD Cowen's Lance Vitanza calls the strategy ambitious yet feasible, noting MSTR's market cap of $111 billion supports its fundraising efforts.
- MSTR has already raised $28.3 billion under the initial plan, with average daily share volume at $5.6 billion.
- Analysts praise increased performance targets: 2025 BTC Yield raised to 25% and BTC Gain target to $15 billion.
- MSTR shares rose 1.8% to $388, while BTC hovers below $97,000.
During the earnings call, CEO Michael Saylor emphasized that wider adoption of bitcoin by companies legitimizes it and drives up prices. He noted the importance of having various BTC firms for market stabilization.
CEO Fong Li addressed dilution concerns, stating equity raises are accretive when issued above net asset value. CFO Andrew Kang acknowledged a $5.9 billion unrealized loss from bitcoin's price drop but expressed confidence in future volatility aligning with long-term strategies.