Shares of Bitcoin (CRYPTO: BTC) proxy stock MicroStrategy Inc. (NASDAQ:MSTR) rallied 11% on Monday, coinciding with a leading analyst reiterating the stock's $650 price target.
What happened: Mark Palmer, an equity research analyst at Benchmark, maintained MicroStrategy with a Buy rating and restated the target at $650, reflecting a 71% upside from the last closing price. Palmer is known to have an accuracy rate of 83%.
Palmer stated that the firm's ambitions to raise $2 billion through preferred stock issues might be a game changer, potentially drawing institutional investors such as insurance companies, pension funds, and banks, who favor assets with fixed dividend payments, The Block reported, citing a Monday note by the analyst.
Preferred stock is a type of equity that offers shareholders fixed dividends while giving them ownership stakes in the company.
Palmer expected the preferred stock offering to include a conversion option into Class A common shares and dividend payments.
See Also: 'Pharma Bro' Martin Shkreli Predicts Liquidation Doom For MicroStrategy Amid Fall Below $300, Says Bitcoin Will Hit $250K Without Michael Saylor
Why It Matters: The preferred stock offering is part of the company's ambitious 21/21 plan—a capital-raising initiative that aims to raise $21 billion through equity financing and $21 billion through fixed-income securities to purchase Bitcoin.
MicroStrategy has been on a mammoth Bitcoin acquisition drive in recent months, with its latest purchase of 1,070 BTC on Monday taking its reserves to 447,470 BTC, worth $45.57 billion. This makes the Michael Saylor-led company the biggest corporate holder of the world's leading cryptocurrency.
Price Action: Shares of MicroStrategy were up 0.37% to $380.50 in the after-hours trading. The stock has gained 484.38% over the past year, according to data from Benzinga Pro.
The stock has a consensus price target of $449.5 based on the ratings of 12 analysts. The high is $690, announced by BTIG on Dec. 11, 2023, and the low is $140, issued by Jefferies on Nov. 10, 2022.
At the time of writing, Bitcoin was exchanging hands at $101,820.72, up 2.17% in the last 24 hours.
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