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    MicroStrategy set for gains; ‘don’t fear the premium,’ analyst says

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    MicroStrategy’s stocks could increase further if the company continues to buy Bitcoin and starts lending the digital currency, according to fintech analyst Mark Palmer. He predicts MicroStrategy’s stock could reach $245 per share, up from his previous estimate of $215. As of October, MicroStrategy owns over 250,000 Bitcoin—worth about $17 billion—while their total market value is around $42 billion. Palmer also suggests that the company could boost additional share price gains by lending some of its Bitcoin holdings to gain more yield.

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    MicroStrategy’s stocks are expected to boost even more, even though they’re already trading at 2.3 times more than the company’s Bitcoin portfolio’s worth, according to a report from an analyst last October 18.

    According to Mark Palmer, a Benchmark fintech analyst, if MicroStrategy continues to buy more Bitcoin and starts lending the digital currency for low-risk gain, its stock, MSTR, could reach up to $245 per share. MSTR shares are currently trading at around $206. This new price projection by Palmer is higher than his previous estimate of $215.

    Despite the increase in those who believe that MSTR should not be trading at such high prices, Palmer argues that they’re overlooking the potent financial growth that the company can achieve through Bitcoin. This strategy was launched by the company in August 2020.

    As of last September, MicroStrategy has more than 250,000 Bitcoin, which is worth approximately $17 billion as of October 18. Meanwhile, the total market value of MSTR shares is around $42 billion.

    During their earnings call last August 1, MicroStrategy remained loyal to buying Bitcoin. They committed to a unique financial metric called Bitcoin yield. This metric measures the ratio of Bitcoin holdings to outstanding shares, setting the Bitcoin-per-share as a cornerstone for the company’s performance.

    The company reported that its Bitcoin Yield was 17.8% from January to September 19 of this year. This yield exceeded the Bitcoin Yields of 1.8% and 7.3% from 2022 and 2023.

    On September 24, Palmer suggested that MicroStrategy should think about lending a chunk of its Bitcoin holdings to gain more yield. By continuing to trade between the US markets and Bitcoin, and accreting Bitcoin per share, Palmer believes that MSTR should be able to boost additional share price gains in the coming quarters.

    Source: Cointelegraph

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