CoinVoice has recently learned that, according to Barrons, Benchmark analyst Mark Palmer has given MicroStrategy a 'buy' rating and proposed a target price of $650 based on the estimated Bitcoin holdings of the company in 2026. He expects the price of Bitcoin to reach $225,000 by the end of 2026.
Analysts are also willing to assign a price-to-earnings multiple to the theoretical earnings created by MicroStrategy's acquisition of Bitcoin through the issuance of stocks or bonds. MicroStrategy mentioned a so-called Bitcoin 'yield' (i.e., the ratio of changes in Bitcoin holdings to the number of shares outstanding), which has exceeded 70% this year. However, this 'yield' depends on the company selling shares at a premium above the value of its Bitcoin holdings, which is uncertain.
The high premium of MicroStrategy in 2024 is a special phenomenon. In 2022 and 2023, the company's stock price was nearly aligned with the value of its Bitcoin holdings, with a premium of about 20% at the end of 2023. If the Bitcoin premium continues to decrease and the price of Bitcoin experiences a significant drop, MicroStrategy's stock price may face further downside risks. [Original link]
