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Wall Street Bank Eyes 53% Surge in Bitcoin Stock
4 Oct
Summary
- Citigroup sees 53% upside for MicroStrategy stock.
- MSTR's value is closely tied to Bitcoin's performance.
- Company holds 847,666 Bitcoin, largest corporate holder.
Citigroup analysts have projected a significant 53% climb for MicroStrategy (MSTR) stock, setting a new price target of $240. This optimistic forecast, initiated with a 'Buy' rating, is underpinned by two key assumptions. First, the bank anticipates Bitcoin's value to rise, forecasting $113,000 per coin within a year, which directly bolsters the value of MSTR's substantial Bitcoin holdings.
MicroStrategy, which began as a software company in 1989, reinvented itself in 2020 by purchasing Bitcoin with funds raised from selling new shares. It currently holds a record 847,666 Bitcoin. Investors often choose MSTR for exposure to Bitcoin without direct ownership, valuing the convenience of stock trading. This strategy proved challenging during recent Bitcoin slumps, forcing the company to pause purchases and even sell some assets.
The company's financial health is assessed via its market net asset value (mNAV), which compares the stock's market price to its Bitcoin holdings. An mNAV above 1 indicates investors are willing to pay a premium for the MSTR wrapper. Following Bitcoin's recent recovery, MSTR's mNAV has risen back above 1, currently standing at 1.20, indicating renewed investor confidence.
