HomeNFT's"Remarkably High" MicroStrategy Stock Price Is Influenced By Debt-Financed BTC Holdings, Investment...

“Remarkably High” MicroStrategy Stock Price Is Influenced By Debt-Financed BTC Holdings, Investment Firm Claims

-


Join Our Telegram channel to stay up to date on breaking news coverage

MicroStrategy’s share price, which is mainly driven by its Bitcoin (BTC) holdings, is “exceptionally high“ and “unjustifiable,” argues investment firm Kerrisdale Capital.

Investors have inflated MicroStrategy’s premium as a result of the company’s BTC holdings. The majority of this BTC was bought through debt financings, equity linked convertible notes and ATM equity offerings, said the firm in a Mar. 28 analyst note

Calling the company’s use of leverage to purchase more BTC “intelligent” is flawed logic, it added.

MicroStrategy 2020 Launches with New HyperIntelligence Functionality

Bitcoin ETFs Could Make MicroStrategy Redundant 

The launch of Spot Bitcoin ETFs (exchange-traded funds) in the U.S. might reduce the need for investors to trade MicroStrategy stocks to gain exposure to Bitcoin, the firm added.

MicroStrategy (MSTR) no longer presents investors with “a rare, unique way to gain access to Bitcoin,” it said in the note. 

Kerrisdale Capital said that MicroStrategy’s “sleepy software analytics business” only makes up 3% of the company’s collective value. Other reasons that argue in favor of MSTR’s value, such as the ability to buy more BTC using the software company’s cash flows, its access to liquidity, the lack of management fees and how easy it is to trade MSTR are all “weak,” the note added. Analysts at the investment firm therefore said they “ are short shares of MicroStrategy.” 

Michael Saylor Maintains A Positive Outlook For The Company

Michael Saylor, the CEO at MicroStrategy, has continually expressed his confidence in the company’s ability to remain attractive to investors. One thing that gives MicroStrategy an edge over spot Bitcoin ETFs, apart from not charging fees, is the leverage it offers investors, Saylor said in a December interview with Bloomberg TV.

More recently, the CEO also revealed that the company will be rebranded as a “Bitcoin development company.” He called this a “natural decision,” in a Feb. 12 interview with CNBC, given the success of MicroStrategy’s Bitcoin investment.

Related Articles:

Smog (SMOG) – Meme Coin With Rewards

Smog tokenSmog token
  • Airdrop Season One Live Now
  • Earn XP To Qualify For A Share Of $1 Million
  • Featured On Cointelegraph
  • Staking Rewards – 42% APY
  • 10% OTC Discount – smogtoken.com

Smog tokenSmog token


Join Our Telegram channel to stay up to date on breaking news coverage



LEAVE A REPLY

Please enter your comment!
Please enter your name here

LATEST POSTS

An Academic Journal by Unlearn Shows Evidence of Implementing AI-Powered Digital Duplicates in the Healthcare Sector

SAN FRANCISCO–(BUSINESS WIRE)–Unlearn®, an artificial intelligence research company today announced its peer-reviewed scientific manuscript, entitled “Increasing Acceptance of AI-Generated Digital Twins Through Clinical Trial...

Forget $10,000, Expert in Cryptocurrency Predicts Ethereum ETFs Will Drive ETH To $14,000

The long-awaited Ethereum ETFs have finally hit the market, marking a significant milestone for Ethereum and other altcoins. Industry experts and enthusiasts are looking...

Solympics Price Projection: SOLYMPICS Drops 43% With Specialists Advising to Look at This Alternate Olympics Meme Coin For 10x Profits

Join Our Telegram channel to stay up to date on breaking news coverage The Solympics price crashed 43% in the last 24 hours to trade...

Most Popular