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Investing.com - Cantor Fitzgerald has significantly lowered its price target on MicroStrategy (NASDAQ:MSTR) to $229 from $560 while maintaining an Overweight rating. This comes as the stock has taken a substantial hit, with InvestingPro data showing a 11.16% decline over the past week, though it’s still trading at $12.1, nearly 4 times above its 52-week low.
The firm cited a recalculation of MicroStrategy’s Bitcoin holdings value, which it estimates at $155 per share based on 650,000 Bitcoin priced at $92,600 each on a fully adjusted share count basis. This calculation backs out the value of preferred shares and USD reserves.
Cantor Fitzgerald also reduced its projection for annual capital market proceeds from $22.5 billion to $7.8 billion ($150 million weekly) and lowered its assumed modified net asset value (mNAV) for fund raising from 1.6x to 1.25x. This adjustment decreased the value applied to MicroStrategy’s treasury operations from $364 per share to $74 per share.
Despite the price target reduction, the firm remains long-term bullish on Bitcoin and believes MicroStrategy’s current share price and mNAV dynamic gives the stock "positive convexity to Bitcoin price appreciation." This aligns with the stock’s recent performance tracked by InvestingPro, which shows a remarkable 134.95% price return over the past six months, despite the company’s overall financial health being rated as weak.
The research firm addressed several market concerns, noting that MicroStrategy has sufficient cash to fund dividends for 21 months and its Bitcoin position worth $60.7 billion far exceeds its debt notional of $8.2 billion, none of which matures until 2028. With a current market capitalization of just $106.84 million according to InvestingPro data, the company’s Bitcoin holdings significantly outweigh its market value.
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