MicroStrategy’s $42B Bitcoin bet is bullish for shareholders: Analyst
2024-11-01

MicroStrategy’s ambitious goal of buying $42 billion worth of Bitcoin BTCUSD by 2027 could be a winner for shareholders, according to an Oct. 31 analyst report shared with Cointelegraph.
During MicroStrategy’s Oct. 30 earnings call, the company tipped plans to raise $21 billion in equity and another $21 billion in debt to fund a three-year, multibillion-dollar BTC buying spree dubbed the “21/21 Plan.”
“If there were any doubts that MicroStrategy (MSTR) would lean into its Bitcoin acquisition strategy amid a rising Bitcoin market, they were dispelled” by the Oct. 30 announcement, Benchmark fintech analyst Mark Palmer told Cointelegraph in an email.
Palmer predicts MSTR stock could be worth $300 if MicroStrategy follows through on the 21/21 Plan. 
He raised his price target for MSTR from his previous estimate of $245, which is now close to MSTR’s current trading price as of Oct. 31. 
Palmer’s model assumes continued price appreciation for Bitcoin, which he expects to hit $175,000 by the end of 2025. 
“MSTR enters this new, even more audacious phase in the execution of its strategy having assembled an impressive track record over the past four-plus years,” Palmer said in the analyst report.
During its Aug. 1 earnings call, MicroStrategy doubled down on BTC buying by committing to a unique performance metric: Bitcoin yield.
Bitcoin yield measures the ratio of BTC holdings to outstanding shares and effectively sets BTC-per-share as a lodestar for corporate performance.
“While many investors have been focused on MSTR’s market capitalization relative to its [net asset value], we believe a more valuable metric for assessing the company’s value is its BTC Yield,” Palmer said.
As of September, MicroStrategy held more than 250,000 BTC, worth more than $17 billion as of Oct. 31.
Meanwhile, the total market capitalization of MSTR shares stands at approximately $42 billion, according to Yahoo Finance. 
“[M]anagement raised their annual target for MSTR’s BTC Yield for each of the next three years from 4-6% to 6-10% to reflect the expected impact of the “21/21 Plan,” Palmer said.
On Sept. 24, Palmer said MicroStrategy should consider a plan to start generating yield “by lending out a portion of its Bitcoin holdings.” 
Magazine: How the digital yuan could change the world… for better or worse