Strategy (NASDAQ:MSTR) isn’t just the world’s biggest corporate holder of Bitcoin – it’s also the only company globally that offers a broad range of Bitcoin-backed securities tailored to specific segments of institutional investors.
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Cowen’s Lance Vitanza, an analyst ranked amongst the top 4% of Wall Street stock experts, believes that while it’s possible to emulate or take a DIY approach, it’s highly unlikely anyone could match, let alone surpass Strategy’s cost of capital advantage.
Last week, Strategy continued to see strong demand across its suite of equity ATMs, setting new price records for multiple preferred stock classes. Under its $21 billion common stock ATM program, the company sold 797,008 shares for $330.9 million, an average of $415.18 per share after commissions. Issuance of its convertible preferred stock (STRK) accelerated notably, with 573,976 shares sold at an average price of $123.87 – marking a new high-water mark, well above the $80 per share at which the series debuted in January. Similarly, issuance of senior preferred shares (STRF) picked up speed, with 444,005 shares sold at an average price of $124.55, also a new high, compared to the $85 IPO price from March.
Meanwhile, Strategy launched a new junior preferred stock ATM (STRD) last week and has already issued 158,278 shares at an average price of $94.77, exceeding the $85 price from its June debut.
“We expect volume and issue price under the STRD ATM to ramp considerably in coming months, as has been the case with the STRK and STRF ATMs,” Vitanza noted.
No prizes for guessing what the company did with the proceeds. Of course, it acquired more bitcoins – 4,225 at an average purchase price of $111,827 each.
Strategy executive chairman and co-founder Michael Saylor has famously said he’ll forever be buying the top, so no “buy low, sell high” going on around here. Nevertheless, it’s a strategy – pardon the pun – that has paid off handsomely for all involved so far.
Massive share price appreciation aside, since the end of 2022, Strategy has grown its Bitcoin holdings – measured by quantity, not market value – by 354%, while its fully diluted share count has risen by 102%. Put differently, shareholders now effectively own more than twice as much bitcoin per fully diluted share as they did just two and a half years ago.
“This degree of value creation is in excess of our expectations and a significant achievement, in our view,” the analyst opined.
To this end, Vitanza rates MSTR shares as an Overweight (i.e., Buy), while raising his price target from $590 to a new Street-high of $680, suggesting the stock will gain 52% in the months ahead. (To watch Vitanza’s track record, click here)
Turning now to the rest of the Street, where one bear is outnumbered by 11 additional Buys, all coalescing to a Strong Buy consensus rating. The forecast calls for one-year gains of 21%, considering the average target clocks in at $541. (See MSTR stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.