Wall Street Investors Support BTC Growth Initiative

Wall Street analysts are resolutely supporting Strategy’s (MSTR) bold expansion of its bitcoin (BTC) purchasing approach following the company’s announcement of plans to significantly increase its capital-raising efforts.

Mark Palmer from Benchmark stated that as more companies attempt to mimic Strategy’s bitcoin acquisition strategy, MSTR has emphasized the magnitude of its first-mover advantage. He underscored how the firm’s capability to accelerate its bitcoin accumulation continues to enhance as its platform grows, maintaining his buy rating and setting a price target of $650.

Despite MSTR trading at more than double its bitcoin asset value, Palmer argues this valuation is favorable, attributing it to Executive Chairman Michael Saylor and his team’s proven track record in enhancing shareholder value through treasury operations.

In its earnings report released Thursday evening, Strategy revealed an extension of its recent 21/21 initiative, aiming to raise $42 billion through the issuance of common stock and debt or similar securities, thus raising the total to $84 billion.

TD Cowen’s Lance Vitanza acknowledged the ambition of the revised strategy, labeling it aggressive but not implausible. The firm highlighted that Strategy has already secured $28.3 billion from the original 21/21 Plan, and the company’s robust $111 billion market capitalization and deep liquidity enhance the viability of these new fundraising efforts. With an average daily share volume of $5.6 billion, Vitanza maintained his buy rating with a price target of $550, indicating that raising an additional $56.7 billion in the next 32 months is achievable.

Both analysts commended Strategy’s decision to enhance its bitcoin performance targets, increasing the 2025 BTC yield target from 15% to 25% and BTC gains from $10 billion to $15 billion. Palmer noted that the company has achieved approximately 90% of its original BTC yield target within just four months.

MSTR shares rose by 1.8% to $388 early Friday as bitcoin remains steady just below the $97,000 mark.

In the earnings call, Saylor commented, “The rise in adoption of the Bitcoin standard by additional companies is advantageous, legitimizing bitcoin and drawing in more investment. The entry of more companies stabilizes and boosts bitcoin’s price,” he remarked, adding, “Each market necessitates its own BTC companies, and as more participants join, it accelerates the shift to the bitcoin standard, prompting others to follow suit.”

In response to dilution concerns, CEO Fong Li highlighted the beneficial aspect of equity raises, stating, “Issuing equity above one times mNAV is accretive rather than dilutive. As mNAV increases, equity issuance transitions more towards fixed income, and we are focused on improving efficiency in the fixed income market.”

CFO Andrew Kang, while recognizing the company’s $5.9 billion unrealized loss in the first quarter due to bitcoin price fluctuations under the newly implemented fair value accounting, expressed confidence, saying, “Despite the volatility, we view the transparency as crucial. We anticipate more favorable movements over time, which aligns with our long-term strategy.”