Benzinga - MicroStrategy Inc (NASDAQ:MSTR), on Wednesday, increased its Bitcoin (CRYPTO: BTC) reserves. The business intelligence company invested $615.7 million to acquire an additional 14,620 BTC. Executive Chairman Michael Saylor said on X that the purchase price for this batch of Bitcoin averaged $42,110 per unit.
What Happened: The report headlined, "All I want for Christmas is Bitcoin: MSTR purchases another $616mm of BTC in December; upping price target" by Canaccord Genuity Corp said Bitcoin saw a 16% surge over the last month and 41% over the past six months, which has been eclipsed by the performance of MicroStrategy’s stock.
The company’s shares have surged by 29% in a single month and 119% over half a year.
Premium Placing on MSTR Shares
MicroStrategy’s proactive approach in accumulating Bitcoin has caused its share price to outstrip the value of its Bitcoin holdings. "Importantly, as MSTR shares continue to appreciate faster than the company’s underlying BTC HODL, the premium at which the stock trades to underlying spot also increases. We now estimate MSTR shares to trade at ~36% to Bitcoin," the analyst note read.
Relative Scarcity of MSTR Shares
Analysts highlight a scarcity premium attached to MSTR shares as investors seek Bitcoin exposure with comparably lower operational risk.
Unlike crypto exchanges or bitcoin mining companies, MicroStrategy’s primarily software-driven business model, characterized as “sticky, highly recurring, and cash flow rich,” presents a safer bet for investors. As a result, the company’s business intelligence software equates to less than 15% of the enterprise value—now dominated by its considerable Bitcoin portfolio.
Expansion of MicroStrategy’s Bitcoin Holdings
The November and December trading period was marked by robust trading volumes and a consistent implicit valuation premium in MSTR shares relative to the underlying Bitcoin assets. "As a result, the company exploited this window to materially and accretively add to its HODL," the note added.
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Analyst Upgrades MSTR Price Target
Canaccord Genuity Corp Analysts have revised their MSTR price target to $791.
Price Action: At the time of writing, MSTR was trading at $670, up 11.03% on Wednesday, according to Benzinga Pro.
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