Analyst claims MicroStrategy’s valuation exceeds Bitcoin’s worth.

Investment firm Kerrisdale Capital has suggested that there may no longer be a compelling reason for investors to trade MicroStrategy stocks as a way to gain exposure to Bitcoin (
BTC
), especially with the approval of various spot Bitcoin exchange-traded funds (ETF) this year. However, MicroStrategy’s executive chairman, Michael Saylor, holds a different opinion.
According to Kerrisdale Capital in a March 28 analyst note, the days when MicroStrategy shares offered a unique route to Bitcoin are long gone, and the firm believes that the price of MSTR is currently overvalued. They disclosed that they have short positions on MicroStrategy stock, which is currently trading at $1,704. Over the past month, the stock has seen a growth of 66.65%, and over the past six months, it has surged by around 419%.
On the other hand, Bitcoin is currently priced at $70,849, marking a 15.8% increase over the last month and a remarkable 163.31% surge over the past six months. Kerrisdale Capital expressed their belief that the rise in MicroStrategy’s shares aligns with the recent spike in Bitcoin’s price, but they caution that things may have gone too far in the crypto world.
The firm highlighted MicroStrategy’s rising debt-to-asset ratio and limited cash flow, pointing out that their software analytics business only contributed $10 million in 2023, making up just 3% of the company’s total value.
Despite these concerns, Saylor remains confident in the appeal of MicroStrategy to investors. He emphasized that the company offers leverage without charging a fee, unlike ETFs. Saylor recently announced a rebranding of MicroStrategy as a “Bitcoin development company,” acknowledging the success of their Bitcoin strategy and leading position as a major Bitcoin holder.
MicroStrategy’s holdings have increased significantly over the past year, with 214,246 Bitcoin currently in their treasury. Saylor reiterated the company’s commitment to accumulating more Bitcoin for shareholders while supporting the growth of the Bitcoin network through software development.
Kerrisdale Capital, while bullish on Bitcoin, suggested that owning Bitcoin directly provides better value for investors than holding MSTR stock. They emphasized that the current MSTR price implies a Bitcoin value of $177,000, nearly two and a half times the actual price.
In conclusion, despite MicroStrategy’s recent stock growth, Kerrisdale Capital advised that shareholders may find more value in owning Bitcoin directly. MicroStrategy declined to comment on these observations. Meanwhile, in the crypto world, a bullish forecast by Bitcoin Man suggests a potential $1 million price target for Bitcoin by 2028.