MicroStrategy (MSTR) Is Selling Convertible — Now Raising Its Projected Sale to $700 Million Worth of Notes — to Fund the Purchase of More Bitcoin (BTC-USD)

The Market Domination team analyzes MicroStrategy's stock price in relation to the value of its own bitcoin holdings.

MicroStrategy (NASDAQ:MSTR) shares rose 1.8% premarket after the company increased its convertible note offering by nearly 40% to $700 million. The company plans to use the proceeds to buy more bitcoin (CRYPTO:BTCUSD).

What Happened: MicroStrategy now expects to raise $700 million from the offering, up from $500 million announced earlier.

The company said in a statement that it intends to use the net proceeds for general corporate purposes, including the acquisition of additional bitcoin.

As of March 31, MicroStrategy held nearly 129,218 bitcoins, acquired for an aggregate purchase price of $4.01 billion and an average price of about $31,000 each.

Bernstein initiated coverage of MicroStrategy with an outperform rating and a price target of $2,890, which implies an 80% upside from current levels.

Analyst Gautam Chitan wrote in a note to clients that MicroStrategy shares have outperformed bitcoin this year, up 600% since MicroStrategy first started buying the cryptocurrency in 2020.

“We attribute this outperformance to investors seeking bitcoin exposure via the premium multiple on MSTR shares, given the limited other options available in the market,” Chitan wrote.

The analyst added that MicroStrategy now owns about 1% of all bitcoin ever created, while other pro-bitcoin companies like Tesla (NASDAQ:TSLA) and Block (NYSE:SQ) hold a much smaller portion of their cash in bitcoin.

“Bernstein likes this leverage strategy and views MSTR shares as a levered way to gain bitcoin exposure,” Chitan wrote.

The Bernstein team also revised up its bitcoin price expectation, now seeing a cycle high of $200,000 by 2025, driven by “unprecedented bitcoin demand via those ETF S and bitcoin supply being constructed.”

MSTR Price Action: MicroStrategy shares traded at $1,592.44 premarket on Monday, up 1.8%.

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News source：https://www.kdj.com/cryptocurrencies-news/articles/microstrategy-mstr-selling-convertible-raising-projected-sale-worth-notes-fund-purchase-bitcoin-btcusd.html

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