MicroStrategy Soars to 8th on WSB as Bold Bitcoin Bet Pays Off
AInvestWednesday, Oct 9, 2024 7:02 am ET
1min read
MSTR --

In the latest WSB rankings, Microstrategy has climbed to the 8th position, advancing 14 places from the previous day. The company's shares rose by 3.28%, marking a three-day increase of 17.62%, and reaching an intraday high unprecedented since August 2024.

Recently, Bernstein analysts have set an ambitious price target of $290 for MicroStrategy's stock, anticipating a possible 64% increase due to the company's bold Bitcoin acquisition strategy. Executive Chairman Michael Saylor has been instrumental in this approach, accumulating Bitcoin holdings valued at approximately $16 billion, placing MicroStrategy among the top 10 holders of the cryptocurrency.

Analysts Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia commend Saylor's pioneering "Bitcoin treasury model for corporates." Their optimistic view hinges on the belief that Bitcoin's price will reach $1 million by 2033, alongside continued cryptocurrency purchases by MicroStrategy. This aligns with the broader market's positive sentiment, driven by Bitcoin's nearly 50% price surge this year.

MicroStrategy's adoption of its Bitcoin strategy in 2020, initiated through convertible note sales, has shown impressive results. Since then, the company's stock appreciation has significantly outperformed benchmarks including Bitcoin itself, as well as Gold, the S&P, Nasdaq, and small-cap software stocks.

Nonetheless, Bernstein warns of potential risks. Should Bitcoin hit $200,000 by the end of next year and then stagnate, MicroStrategy might need to divest holdings to meet shareholder obligations, risking financial instability.

Despite these challenges, MicroStrategy's market capitalization has soared to over $35 billion, positioning it competitively with several S&P 500 companies. Yet, its current lack of profitability, evidenced by a second-quarter net loss of $102 million in 2024, suggests that immediate inclusion in the S&P 500 remains improbable.

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