MicroStrategy (MSTR) is at it again – the software company revealed that it purchased an additional 18,300 Bitcoins (BTC-USD) from August 6 to September 12. This was done at an average price of $60,408 per Bitcoin, which equates to more than $1.1 billion. As a result, the company’s total holdings are 244,800 Bitcoins, valued at $14.67 billion at the time of writing.
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MicroStrategy funded the purchase with the money it raised from selling shares as part of an agreement made on August 1, 2024. Indeed, the company had previously agreed to sell up to $2 billion worth of its class A common stock.
With such a large Bitcoin stash, it is no wonder why Barclays analyst Ramsey El-Assal recently compared MicroStrategy to a Bitcoin index fund that also generates its own cash. In fact, he believes the firm is a way to tap into both Bitcoin’s price moves and MicroStrategy’s ability to keep adding to its crypto pile.
In fact, MicroStrategy has the advantage of tapping the capital debt market to significantly leverage its ability to buy more Bitcoins. On the other hand, individual investors don’t have that capability, as they are mostly limited to brokerage loans or personal loans, which tend to carry higher interest rates and require more frequent repayments. Therefore, MSTR is essentially a leveraged bet on Bitcoin for investors who do not want to use actual debt of their own.
Is MicroStrategy a Buy?
Overall, analysts have a Strong Buy consensus rating on MSTR stock based on nine Buys assigned in the past three months. Over the past year, MSTR has increased by a whopping 308%, and the average MSTR price target of $208.78 per share implies an upside potential of 47.58% from current levels.
