Key Takeaways
B. Riley boosted its price target for MicroStrategy Inc. (NASDAQ: MSTR) to $200 on April 29, an increase from its prior target of $188, citing a convergence of Bitcoin price momentum and the company’s capital strategy. The new target suggests a potential 25% upside from the stock's recent trading price of around $160.
In a note to clients, the firm highlighted three factors for the upgrade, including recent crypto market weakness that it views as a “tactical entry point” for investors. Analysts led by Fedor Shabalin said MicroStrategy’s high correlation with Bitcoin’s price offers an attractive entry when the cryptocurrency pulls back.
The upgrade follows a period of aggressive Bitcoin accumulation by MicroStrategy, which has solidified its position as the leading corporate holder of the digital asset. The company’s treasury has swelled to 815,061 BTC, valued at approximately $63.46 billion as of April 26. This puts its average cost per coin at $75,528.
The core of B. Riley’s thesis rests on the success of MicroStrategy’s strategy to raise capital to fund its Bitcoin purchases. The firm has used its preferred share issuance, including the STRC series offering yields up to 11.5%, to acquire more Bitcoin. This strategy has been criticized by gold advocate Peter Schiff, who has referred to the model as a “Ponzi scheme” dependent on new capital to pay dividends. However, Executive Chairman Michael Saylor has countered that Bitcoin only requires 2.05% annual appreciation to cover the dividend obligations indefinitely.
MicroStrategy’s recent buying has pushed its holdings beyond those of the largest spot Bitcoin exchange-traded fund. A purchase of 34,164 BTC for approximately $2.54 billion between April 14 and April 20 vaulted its total holdings past the BlackRock iShares Bitcoin Trust (IBIT), which holds about 806,178 BTC.
This milestone has put a one million BTC target within the realm of possibility, according to some analysts. Alex Thorn, Head of Firmwide Research at Galaxy Digital, projects that MicroStrategy could surpass the estimated 1.1 million BTC holdings of Bitcoin’s creator, Satoshi Nakamoto, as early as November 2026 if it maintains its current buying pace.
Whether the company can sustain this pace depends on continued investor demand for its preferred equity instruments and Bitcoin’s ability to stay above the firm’s average cost basis. With Saylor signaling more buying ahead, the strategy remains a high-stakes bet on Bitcoin’s long-term appreciation.
This article is for informational purposes only and does not constitute investment advice.
