Canaccord Genuity analyst Joseph Vafi said MicroStrategy Incorporated MSTR remained the “most streamlined play” when it came to hamstrung equity investors gaining exposure to Bitcoin BTC/USD.
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The MicroStrategy Analyst: Vafi maintained the buy rating with a price target of $372, indicating he sees a 44.6% upside for the stock of the company cofounded by Michael Saylor, considering Tuesday’s closing price.
The MicroStrategy Thesis: The Canaccord Genuity noted that MicroStrategy allowed investors to get exposure to digital assets without the “need to invest” in futures ETFs, close-ended fund vehicles and Bitcoin mining companies.
“If market volatility subsides, we view MSTR as one of the more leveraged plays to any rebound in the price of Bitcoin, even modestly back towards 2021 valuation levels.”
Vafi acknowledged in the note that there are other ways to “play” Bitcoin through the equity markets but MicroStrategy’s shares are unencumbered by costs or operating risks associated with other business models.
MicroStrategy announced a loss per share of $0.96 in the third quarter on Tuesday, which is lower than the Street estimate of earnings per share of $0.27, according to Benzinga data.
Vafi noted that the company’s BTC holdings reached over 130,000 and are worth nearly $2.6 billion. He said, “We view the main value driver for MSTR to still be its BTC holdings.”
“MSTR is by far the largest enterprise owner of BTC at this point, we believe the company’s relatively conservative strategy of keeping most of its holdings unencumbered has been prudent, especially considering all the macro volatility we have seen over the past couple of quarters.”
MicroStrategy Price Action: MicroStrategy shares dropped 3.85% lower to $257.20 on Tuesday, according to Benzinga Pro data.