Bernstein has started coverage of MicroStrategy stock with a Buy rating and a $2,890 price target. Analyst Gautam Chhugani expects Bitcoin’s price to soar to $200,000 by 2025, up from his previous target of $150,000, due to high demand and limited supply. Given that MicroStrategy is the largest corporate holder of Bitcoin, it stands to benefit if his prediction comes true.
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He also pointed out that MicroStrategy’s aggressive strategy of leveraging Bitcoin has resulted in a higher amount of Bitcoin per equity share, which supports a premium valuation for the company’s stock.
MicroStrategy to Raise $700M
After MicroStrategy (NASDAQ:MSTR) announced yesterday that it was planning to raise $500 million in convertible debt, the tech company revealed today that the number has increased to $700 million following strong investor demand. Buyers also have the option to purchase an additional $100 million in notes within 13 days.
These notes will come with a 2.25% annual interest rate and can be converted into cash, shares of MicroStrategy’s class A common stock, or a mix of both at an initial conversion price of around $2,043.32 per share. They will mature on June 15, 2032.
MicroStrategy aims to use the approximately $687.8 million from this deal, or $786 million if the additional notes are sold, to buy more Bitcoin (BTC-USD) and for general corporate purposes.
Is MSTR Stock a Good Buy?
Overall, Wall Street analysts have a Strong Buy consensus rating on MSTR stock based on four Buys assigned in the past three months, as indicated by the graphic below. After a 436% rally in its share price over the past year, the average MSTR price target of $1,793 per share implies 21% upside potential.
