Investment firm Kerrisdale Capital argues that with the approval of several spot Bitcoin exchange-traded funds (ETF) this year, investors have little reason to trade MicroStrategy stocks for exposure to Bitcoin (
BTC
). Despite this, MicroStrategy’s executive chairman Michael Saylor disagrees.
Kerrisdale Capital stated in a March 28 analyst note that the days when MicroStrategy shares were a unique way to access Bitcoin are long gone, and believes that MSTR is currently overvalued. The firm disclosed that it has taken short positions on MicroStrategy stock.
Currently, MSTR is trading at $1,704, with a one-month growth of 66.65% and a six-month increase of approximately 419%. On the other hand, Bitcoin is priced at $70,849, reflecting a one-month increase of 15.8% and a 163.31% rise over the past six months.
Kerrisdale Capital mentioned that MicroStrategy’s escalating debt-to-asset ratio and meager cash flow, totaling just $10 million in 2023 from its software analytics business, could be a cause for concern. Saylor, however, remains confident in the company’s appeal to investors.
Saylor stated in a recent interview with Bloomberg TV that MicroStrategy still provides a high-performance vehicle for long-term Bitcoin investors, offering leverage without charging a fee, unlike ETFs. He also announced a rebranding of the company as a “Bitcoin development company.”
MicroStrategy currently holds 214,246 Bitcoin, marking a significant increase from its holdings a year ago. Saylor emphasized the company’s flexibility in managing capital and operations, aiming to accumulate more Bitcoin for shareholders and support the growth of the network.
Kerrisdale Capital remains bullish on Bitcoin, suggesting that owning Bitcoin directly provides better direct value than holding MSTR stock. The firm disclosed long positions in two newly approved spot Bitcoin ETFs.
Despite MicroStrategy’s stock growth over the past year, it declined by approximately 11.18% on a given day. MicroStrategy did not respond to a request for comment by the time of publication.
In related news, Bitcoin Man, X Hall of Flame, predicts a $1 million price target by 2028, attributing the future bullish run to China’s influence on the market.