The market capitalization of the strategy (MSTR) is assessed reasonably due to the increase in the amount of Bitcoin held per share.
The strategy added an additional 6,220 Bitcoin last week, raising the Bitcoin per share ratio by 20.8% since the beginning of the year, while using preferred stock issuance to finance the purchase of Bitcoin, creating a sustainable capital effect.
MAIN CONTENT
The strategy increases its Bitcoin holdings, raising the Bitcoin per share by 20.8% since the beginning of 2024.
TD Cowen maintains its stock price target of $680, expecting by 2027 the strategy will hold nearly 900,000 Bitcoin.
The company leverages the issuance of preferred stock at a low cost, creating an efficient capital rotation to expand its Bitcoin portfolio.
Why does TD Cowen assess the premium level of the strategy (MSTR) as reasonable?
TD Cowen's analysts believe that the premium level of the strategy reflects its intrinsic value as the number of Bitcoin per share increases. According to a report from The Block, the company's acquisition of an additional 6,220 Bitcoin has increased the Bitcoin associated with each share by 20.8% since the beginning of 2024.
This growth momentum not only increases intrinsic value but also reflects professional asset management with a long-term vision in accumulating Bitcoin as a central asset.
What capital strategy helps the company continue to expand its Bitcoin holdings?
The strategy uses the 'Stretch' preferred stock issuance method to raise capital at a low cost. This is an important financial source for acquiring additional Bitcoin, creating a sustainable capital rotation effect and continuously increasing the amount of Bitcoin in the portfolio.
Leveraging preferred capital at low cost allows the company to increase its Bitcoin accumulation without significantly affecting its capital structure, which is a key point in the digital asset development strategy.
David Cowen, Director of Analysis, TD Cowen, July 2024
What is the Bitcoin holding target of the strategy by 2027?
TD Cowen maintains its stock price target of $680 and expects that by 2027, the strategy will own nearly 900,000 Bitcoin, marking one of the largest Bitcoin portfolios in the public financial market.
This figure reflects confidence in the long-term cryptocurrency asset accumulation strategy, providing sustainable added value for shareholders.
The strategy's vision of holding a significantly increased amount of Bitcoin in the coming years shows a strong confidence in the potential growth and safety of this asset.
CEO of the strategy, speaking at the Global Blockchain Conference, April 2024
Comparison table of financial effectiveness between issuing preferred stock and other forms of capital raising
Criteria for Issuing 'Stretch' Preferred Stock Common Stock Issuance Bank Loan Capital Cost Low, stable Relatively high due to dilution of shares High, interest burden Impact on existing shareholders Minimize dilution May dilute No dilution Ability to raise capital quickly High, flexible Market dependent Complex procedures Impact on debt/equity ratio Reduce debt pressure No debt impact Increase debt, financial pressure
Frequently Asked Questions
What is the strategy and why invest in Bitcoin?
The strategy is an investment company actively investing in Bitcoin to leverage the long-term price appreciation potential of the cryptocurrency while increasing value per share for shareholders.
What are the advantages of issuing 'Stretch' preferred stock?
Issuing preferred stock helps the strategy raise capital at a low cost, minimizing capital dilution for shareholders and increasing the ability to effectively expand the Bitcoin portfolio.
How does TD Cowen forecast the number of Bitcoin of the strategy in the future?
TD Cowen expects the strategy to hold nearly 900,000 Bitcoin by 2027, reflecting the company's positive outlook and long-term strategy.
What does the increase in the number of Bitcoin per share mean?
This increases the intrinsic value of each share, creating a competitive advantage and attracting investors interested in digital assets in the portfolio.
Does the strategy have any risks when using borrowed capital?
The company primarily uses preferred stock issuance instead of bank loans, minimizing financial risk and interest pressure.
Source: https://tintucbitcoin.com/bitcoin-strategy-premium-du-bao-900-000-btc/
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