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On Tuesday, H.C. Wainwright analyst Mike Colonnese initiated coverage on MicroStrategy Incorporated (NASDAQ:MSTR) with a Buy rating and a price target of $480, representing significant upside from the current price of $369.25. The firm’s analysis suggests that MicroStrategy offers a unique investment opportunity for those looking to leverage the potential growth of Bitcoin (BTC), which is expected to rally in the second half of 2025. According to InvestingPro data, analyst targets for MSTR range from $175 to $650, reflecting the stock’s high volatility with a beta of 3.47.
Colonnese highlighted MicroStrategy’s strategic approach to utilizing its substantial Bitcoin reserves, currently valued at approximately $49 billion, to secure additional capital. Over the past two quarters, the company has successfully raised over $25 billion through equity and debt financing. This capital has enabled MicroStrategy to purchase BTC at a rate that surpasses its share issuance, thereby justifying a premium to its net asset value (NAV). InvestingPro data shows the company has delivered an impressive 185.58% return over the past year, though it operates with a moderate debt level and a current ratio of 0.71.
The report also pointed out the importance of MicroStrategy’s first-mover advantage and the credibility it has established by consistently holding onto its Bitcoin reserves, a strategy that aligns with the principles valued by Bitcoin maximalists. This approach has garnered a strong retail shareholder base, which remains loyal to the company. With the next earnings report due in just 2 days, InvestingPro subscribers can access 12 additional ProTips and comprehensive analysis through the Pro Research Report, which provides deep insights into MSTR’s $96.17 billion market valuation and future prospects.
Institutional investors, according to Colonnese, may not fully appreciate the resilience of MicroStrategy’s premium to NAV. They may also be underestimating the upside potential of Bitcoin in 2025 and, consequently, MicroStrategy’s ability to raise further capital for additional BTC acquisitions.
Colonnese’s coverage suggests that MicroStrategy’s shares have the potential to outperform Bitcoin itself in the year 2025, given the company’s aggressive investment and capital-raising strategies. The analyst’s outlook remains positive, despite acknowledging the possibility of a short-term correction in Bitcoin prices in the second quarter due to broader macroeconomic headwinds.
In other recent news, MicroStrategy Incorporated has been actively engaged in financial maneuvers, including significant sales of its shares and investments in Bitcoin. From April 21 to April 27, 2025, the company sold 4,020,000 shares of its Class A Common Stock, raising $1.40 billion in net proceeds, and 435,069 shares of its 8.00% Series A Perpetual Strike Preferred Stock, generating $37.5 million. These proceeds were used to purchase 15,355 bitcoins at an aggregate price of $1.42 billion. Earlier, between April 14 and April 20, MicroStrategy had sold 1,755,000 shares of its Class A common stock, resulting in approximately $547.7 million in net proceeds, and purchased 6,556 bitcoins.
In another development, Benchmark analysts maintained a Buy rating for MicroStrategy’s stock, despite the company’s preannouncement of a $5.91 billion unrealized loss on its bitcoin holdings due to new fair-value accounting rules. This loss was partially offset by a $1.69 billion income tax benefit. The new accounting standards require companies to report market value fluctuations of their bitcoin holdings, impacting MicroStrategy’s financial statements. Amid these financial updates, MicroStrategy has not engaged in the sale of additional shares or purchased more bitcoin following the close of the quarter. These activities reflect the company’s ongoing strategy and response to the volatile cryptocurrency market.
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