MicroStrategy in Unique Position to Benefit From Rising Bitcoin Price: Berenberg
The bank initiated coverage of the stock with a buy rating and a $430 price target.
MicroStrategy (MSTR) is in a unique position among publicly listed companies to benefit from an increase in the price of bitcoin (BTC), German investment bank Berenberg said in a report Thursday.
Berenberg initiated coverage of the stock with a buy rating and a $430 price target. The shares slid about 2% in premarket trading Friday to $312.
The business analytics software company founded by Michael Saylor, now executive chairman, is the largest corporate holder of bitcoin as a balance sheet treasury asset. It owns about 140,000 bitcoins that it paid an average price of $29,800 for. The stash is worth about $4.1 billion at current prices.
MicroStrategy's shares offer an “attractive way for investors to gain exposure to bitcoin and to navigate the digital asset space amidst the ongoing regulatory crackdown,” analyst Mark Palmer wrote.
“Bitcoin has emerged as a safe haven relative to other crypto tokens,” Palmer's note said. If investors “increasingly turn to bitcoin as an alternative currency amidst macro-related fears, then MicroStrategy shares stand poised to benefit.”
The fourth bitcoin halving, scheduled for May 2024, may serve as a positive catalyst for bitcoin's price and by extension, for MicroStrategy shares, the note added.
MicroStrategy is scheduled to report its first-quarter earnings after the market closes on Monday.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.