The Zhitong Finance App learned that recently, MicroStrategy (MSTR.US) revealed that the company purchased about 55,500 bitcoins again between November 18 and 24, 2024, at a cost of about 5.4 billion US dollars. This move increased its Bitcoin holdings by around 17%.

As a software company, MicroStrategy has long been regarded by the market as a “synonym” for investing in Bitcoin due to its huge Bitcoin reserves on its balance sheet. According to reports, the average purchase price of the new Bitcoin was 97,862 US dollars, and while the Bitcoin price is hovering near the high of 0.1 million US dollars, MicroStrategy continues to increase purchases of this digital asset.

As of November 24, 2024, MicroStrategy held a total of approximately 0.3867 million bitcoins, spending a total of about $21.9 billion, and an average purchase price of $56,761 each.

The large-scale purchase benefited from MicroStrategy's recent capital raising: the company raised about $2.97 billion in net income by issuing 0% convertible senior notes due in 2029; at the same time, it sold 5,597,849 shares through an “anytime market issuance agreement”, with a net income of approximately $2.46 billion. As of November 24, 2024, the company still has approximately $12.8 billion worth of shares available for issuance and sale.

These financing actions triggered Wall Street analysts to raise MicroStrategy's share price target: Canaccord Genuity raised the target price from $300 to $510; Bernstein raised the target price from $290 to $600; and Benchmark raised the target price from $450 to $650.

Bernstein analyst Gautam Chhugani predicts that within the next ten years, MicroStrategy's Bitcoin holdings will account for 4% of the global Bitcoin supply, a significant increase from the current 1.7%. In his report to clients, he said, “MicroStrategy's Bitcoin asset model is unprecedented on Wall Street. The company is on a relentless path to attracting global capital and investing in Bitcoin.”

Canaccord analyst Joseph Vafi suggested evaluating the value of MicroStrategy from the perspective of a “partial valuation method” (sumparts valuation) rather than traditional profit and loss indicators. He pointed out that one of the key metrics for measuring the company's Bitcoin yield is “bitcoins per share,” which is a 41.8% year-on-year increase as of November 17, 2024. Vafi said, “The fact that the amount of Bitcoin per share has almost doubled is already attractive; if this increase is combined with the increase in Bitcoin's spot price over the same period, the final dollarized earnings per share are quite impressive, even though these gains are not reflected in the profit and loss statement.”

Benchmark analyst Mark Palmer added: “When evaluating MicroStrategy's equity value, we believe that the value created by the company's asset liability management capabilities over the long term should be included in its comprehensive stock price analysis, just like the value created by other companies through the production of goods and services.”