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bitcoin's April 20 halving and strong demand for btc ETFs could give MicroStrategy's stock price a substantial boost as the company is well positioned to benefit, broker Benchmark said.
Benchmark increased its price target for Microstrategy (MSTR) from $990 to $1,875, while maintaining a Buy rating for the company. The elevated target is based on the assumption that btc will reach $150,000 by the end of 2025, an increase from a previous estimate of $125,000.
MSTR price responded positively to the report, arising more than 5% in the last 24 hours to trade at $1,512.99 at 2:50 am EST.
“While the upcoming bitcoin halving will create a supply shock like previous ones did, we believe the impact of the event could be magnified by the concurrent demand shock created by the emergence of bitcoin exchange-traded funds (ETFs). spot bitcoin,” said analyst Mark Palmer. . “We expect inflows into spot bitcoin ETFs to grow dramatically once institutions start investing in them seriously.”
MicroStrategy is expected to increase its btc reserves in the coming weeks, using proceeds from capital market transactions, Benchmark said.
The extra money generated by its software business will also be used to purchase more btc, according to the report. Benchmark predicts that the company will have 298,246 btc by the end of 2025, up from 214,246 coins as of March 19.
MicroStrategy stock price is “unjustifiable”
Not everyone is bullish on MicroStrategy's stock price. Investment firm Kerrisdale Capital said in a March 28 investigation note that MSTR is priced “exceptionally high” and called its valuation “unjustifiable.”
<blockquote class="twitter-tweet” data-width=”550″ data-dnt=”true” wp_automatic_readability=”6.739336492891″>
Kerrisdale Capital's short position in twitter.com/hashtag/MicroStrategy?src=hash&ref_src=twsrc%5Etfw”>#MicroStrategy ($MSTR) about to feel the squeeze!!! Don't jump in front of a freight train pic.twitter.com/s7c9Mf0Kv6
– InvestAnswers (@invest_answers) twitter.com/invest_answers/status/1775889996316369016?ref_src=twsrc%5Etfw”>April 4, 2024
Investors have inflated the of the company premium as a result of its btc holdings, the firm said. With most of this btc purchased through debt financings, equity-linked convertible notes, and ATM stock offerings, Kerrisdale Capital maintains That calling the company's use of leverage to purchase btc “smart” is flawed logic.
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