30s Summary

MicroStrategy plans to acquire $42 billion worth of Bitcoin by 2027, according to an analyst report shared with Cointelegraph. They aim to raise $21 billion in equity and $21 billion in debt to fund this purchasing plan, dubbed the “21/21 Plan.” Analyst Mark Palmer suggests the company’s stock could reach $300 if this plan is executed successfully while predicting Bitcoin to hit $175,000 by 2025. As of September, MicroStrategy held over 250,000 Bitcoin worth more than $17 billion. Palmer also suggested that the firm could generate revenue by lending out a portion of its Bitcoin holdings.

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MicroStrategy is all set on a major Bitcoin buying spree, hoping to snap up a whopping $42 billion worth of Bitcoin by 2027. This news comes from an analyst report shared with Cointelegraph at the end of October. It suggests that shareholders may be in for a treat if things go as planned.

The company announced during its earnings call on October 30 that it plans to raise $21 billion in equity and the same amount in debt. This is to fund their plan to buy a ton of Bitcoin over the next three years in a strategy they’re calling the “21/21 Plan.”

If you had any doubts whether MicroStrategy would keep buying Bitcoin especially when its price is on the rise, then this announcement should clear that up. This assurance comes from Mark Palmer, a fintech analyst from Benchmark, in an email to Cointelegraph right after the company’s announcement.

Palmer feels the company’s stock (MSTR) could hit $300 if their 21/21 Plan is executed without hitches. He previous price target for MSTR was $245, which is almost the same as its current trading price.

Taking into account his considerations that the price of Bitcoin will keep appreciating, he predicts Bitcoin will hit $175,000 by the end of 2025. According to Palmer, with the company’s impressive track record over four plus years, its entering a more ambitious phase of its strategy.

In its earnings call on August 1, MicroStrategy committed to a unique performance metric: Bitcoin yield. This measures the ratio of its Bitcoin holdings to outstanding shares and essentially positions BTC-per-share as a significant indicator of its corporate performance.

In his views, many investors often focus on the company’s market capitalization relative to its net asset value. However, Palmer suggests that the BTC yield would be a more valuable metric for determining the company’s value.

As of the end of September, MicroStrategy held over 250,000 Bitcoin, which was worth more than $17 billion as of end of October. On the other hand, the total market capitalization of MSTR shares is around $42 billion as per Yahoo Finance.

MicroStrategy management raised their annual target for the company’s BTC Yield for each of the next three years from 4%-6% to 6%-10%. This ingenious move can hugely reflect the expected impact of the 21/21 Plan.

On September 24, Palmer suggested that MicroStrategy could start generating yield by lending out a portion of its Bitcoin holdings. It’s a strategic move that could significantly boost the company’s revenue.

Source: Cointelegraph