MicroStrategy’s (NASDAQ:MSTR) appetite for Bitcoin appears to be bottomless. The Michael Saylor-led company announced on Monday that it had acquired another 5,262 BTC worth $561 million last week, representing the company’s seventh consecutive week of Bitcoin purchases.
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Following the latest acquisition, MicroStrategy’s Bitcoin holdings have risen to a total of 444,262 BTC, currently worth just under $42 billion.
The latest purchase was fully funded through equity issuance under its $21 billion ATM (at-the-market) facility. The company now has $7.08 billion of available capacity left under the program. Recall, MicroStrategy recently unveiled the new ATM facility as part of its ambitious intention to raise $42 billion in capital by the end of FY27. That will be spent on, what else, more Bitcoin.
Given the pace of purchases, all the activity has caused TD Cowen analyst Lance Vitanza to alter his MSTR model. “At the time raising $42 billion in just three years seemed aggressive; having raised over $15 billion of common equity since Halloween – on top of an upsized $3 billion convertible notes offering – the target looks increasingly conservative,” Vitanza, who ranks amongst the top 2% of Wall Street stock experts, opined. “To wit, we now model MicroStrategy raising over $55 billion of capital from the date of announcement through the end of FY27.”
The announcement of the latest buying spree coincided with the day MSTR’s inclusion in the Nasdaq 100 index came into effect. Although never a major part of Vitanza’s thesis, he believes MicroStrategy’s inclusion in the Nasdaq 100 is likely to boost the “broader adoption” of Bitcoin across both developed and developing financial systems, as well as positively impact the price of Bitcoin and, by extension, MSTR shares. While some analysts focus on technical factors, such as the number of MicroStrategy shares that index funds will need to acquire to maintain index matching, the 5-star analyst thinks the impact extends well beyond that. “Inclusion in the index suggests wider and greater institutional (as opposed to retail) ownership than has been the case up to now,” Vitanza said. “Moreover, we view MicroStrategy being included in the Nasdaq 100 essentially as bitcoin itself being included in the Nasdaq 100. In a sense, ‘we are all bitcoin investors’ now.”
Bottom-line, Vitanza maintained a Buy rating on MSTR shares backed by a $550 price target. The implication for investors? Upside of 65.5% from current levels. (To watch Vitanza’s track record, click here)
It’s Buys only amongst Vitanza’s colleagues too – 8, in total – all coalescing to a Strong Buy consensus rating. The forecast calls for one-year returns of 59%, considering the average target currently stands at $529.57. (See MSTR stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
