Michael Saylor Strategy is doubling down on its Bitcoin accumulation, executing a sharp policy reversal that has drawn criticism for its abruptness but has failed to deter Wall Street’s optimism. While the company’s stock, MSTR, has slid 20%, analysts are holding firm on a price target that suggests a more than 50% rally from current levels.
A Flexible Capital Strategy or a “Sloppy” Reversal?
On the 19th of August, Saylor announced a significant update to the company’s equity “at-the-market” (ATM) program. The new guidance removes a previous restriction, now allowing Strategy to issue and sell MSTR stock to fund further Bitcoin purchases, even if the stock’s premium to its underlying crypto assets falls.
Source: X Before Twitter
“Strategy today announced an update to its MSTR Equity ATM guidance to provide greater flexibility in executing our capital markets strategy.” – Michael Saylor, via X.
This move reverses a policy established less than a month prior, which tied stock issuance to the company’s modified net asset value (mNAV) trading above a 2.5x premium. The mNAV, a key metric that measures the premium or discount of the stock price relative to its Bitcoin holdings, currently stands at 1.59x, a steep drop from its November high of 3.89x.
The rapid pivot has been met with skepticism from some market participants. Critics argue the U-turn could erode investor trust. “Not a good look and does not give me any confidence as a stockholder,” noted one user on Reddit. Another on X (formerly Twitter) described the move as “sloppy.”
Analysts Unfazed, Eyeing $680 Target
Despite the backlash and a recent 20% drop in MSTR’s price from over $457 to the $360 support level, institutional analysts remain staunchly bullish.
Following the news, investment firm TD Cowen reiterated its “buy” rating and a $680 price target for MSTR. They are not alone. A consensus of ten other Wall Street analysts maintains a “buy” rating, projecting a potential upside of over 50% for the stock. Pro-MSTR analyst Jeff Walton dismissed the criticism as short-term “FUD” that would likely fade by October.
The confidence is seemingly fueled by Strategy’s unwavering commitment to its core mission. The company recently added another 430 BTC to its treasury for $51,4 million. This latest acquisition brings its total hoard to an impressive 629.376 BTC, valued at approximately $74 billion, solidifying its position as the largest corporate holder of Bitcoin.
Disclaimer: This article is provided for informational purposes only and does not constitute financial advice. Investors should always conduct their own thorough research and consult with a qualified financial advisor before making any investment decisions in cryptocurrencies, which are highly volatile and speculative assets.
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