MicroStrategy’s NASDAQ:MSTR Stock Climbs 2.5 % Premarket After Buying More BTC – Is a $350 Next?
By funding Bitcoin purchases through ATM equity and preferred sales, Strategy takes its total haul to $44.9 billion – does the current ~$87,400 Bitcoin price signal more upside for MSTR? | That's TradingNEWS
NASDAQ:MSTR’s Aggressive Bitcoin Accumulation Strategy
When MicroStrategy (NASDAQ:MSTR) announced it had scooped up 6,556 bitcoins between April 14 and April 20 at an average cost of $84,785 per coin, totaling $555.8 million, the market took note. Under its at‑the‑market program the company also sold 1.755 million shares of its common stock and 91,213 shares of its Series A perpetual strike preferred (STRK), netting $555.5 million in proceeds. Those funds financed the latest tranche of digital gold, bringing MicroStrategy’s treasury to 538,200 BTC acquired for $36.47 billion at an average price of $67,766 per token. Every incremental purchase deepens MicroStrategy’s identity as the world’s largest corporate Bitcoin holder (chart its real-time trajectory here).
Funding the Hoard via ATM Equity and Preferred Sales
Rather than tapping bank credit lines, MicroStrategy leans on its Common ATM program—which has $1.53 billion still available of the $21 billion capacity—and its STRK preferred sales program with $20.96 billion remaining. By converting shareholder equity and preferred stock into dry powder, the company can deploy capital on a rolling basis without pausing the Bitcoin shopping spree. The mix of common and preferred share issuances gives MicroStrategy the flexibility to balance dilution against the imperative of capturing more BTC before the next halving cycle.
Scale of the Bitcoin Reserve and Average Cost Basis
MicroStrategy’s balance sheet now carries over half a million bitcoins, representing roughly 2.6 percent of Bitcoin’s total supply. At today’s market price of around $87,400, those holdings are valued north of $47 billion, implying an unrealized gain on last week’s acquisitions but a cumulative unrealized loss of $5.91 billion for Q1 2025 under mark‑to‑market accounting. That first‑quarter loss drove a net quarterly loss and sent the stock tumbling on April 7, yet the company warned that volatility is baked into its strategy: “We may not be able to regain profitability in future periods, particularly if we incur significant unrealized losses related to our digital assets.”
Pre‑Market Gains and Correlation with Bitcoin Movements
Despite the Q1 writedown, MSTR stock climbed 2.5 percent in Monday pre‑market trading as Bitcoin itself jumped 3.6 percent to $87,400. Historically, MicroStrategy shares have exhibited roughly a 2× beta to Bitcoin’s moves, amplifying rallies but also magnifying drawdowns. In early April, while the Nasdaq plunged 11 percent, Bitcoin’s retrenchment was capped at 6 percent, underlining digital gold’s growing role as a hedge in turbulent equity markets.
Vanguard, BlackRock and the 13,000‑Institution Army
MicroStrategy’s share register reads like a who’s‑who of institutional finance. Vanguard Group leads with over 16 million shares, albeit down 6.5 percent in Q4 2024. Behind it stand BlackRock, UBS Asset Management, State Street, Cantor Fitzgerald and Morgan Stanley. Michael Saylor estimates more than 13,000 institutions and 814,000 retail accounts hold MSTR directly, while 55 million beneficiaries gain indirect exposure via ETFs, pensions and insurance portfolios (see insider transactions). The company’s admission to the Nasdaq‑100 in December 2024 has only funneled more passive inflows into the Bitcoin proxy.
TD Cowen’s Volume and Correlation Findings
Analyst Michael van de Poppe of TD Cowen recently noted that despite MicroStrategy’s multibillion‑dollar Bitcoin buys, their impact on overall BTC prices is muted—just 3.3 percent of weekly trading volume and a 25 percent correlation between purchase volume and price. That suggests MicroStrategy’s hoard swells have more signal for its shareholders than for the broader market, affirming its role as a niche levered play on scarcity rather than a market‑moving whale.
Japanese Corporates Joining the Frenzy
Institutional appetite for Bitcoin is no longer confined to U.S. balance sheets. Japan’s Metaplanet snapped up 330 BTC this month, lifting its total to 4,855 coins worth $420 million. Fashion firm ANAP Holdings added 16.6591 BTC (~$1.4 million), reporting a 12.1 percent Bitcoin yield this quarter after a 95 percent yield last quarter. Their moves underscore a global pattern: corporates are treating BTC as an appreciating treasury asset and potential hedge against macro uncertainty.
The $42 Billion 21/21 Plan in Motion
Under its so‑called 21/21 blueprint, MicroStrategy aims to raise $42 billion by 2027, split equally between debt and equity, to amass even more BTC. The company has already secured $20 billion toward that goal, refinancing older convertible debt into lower‑coupon notes to maintain a target “BTC Yield”—MicroStrategy’s proprietary metric tracking Bitcoin per share growth—above 15 percent annually. This financial engineering has driven a remarkable 74.3 percent BTC Yield in 2024, meaning Bitcoin per share rose by nearly three‑quarters even as dilution occurred.
Preferred Stock and Convertible Debt Maneuvers
MicroStrategy’s playbook features perpetual strike preferred stock (STRK) with a 10 percent yield and convertible senior notes that kick in upon share price milestones. These instruments allow the firm to sell fresh securities at attractive yields and use the proceeds exclusively for Bitcoin, preserving its equity runway while deftly managing leverage.
Analysts’ Price Target Range from $175 to $650 in Sight
Consensus among Wall Street strategists ranges from a cautious $175 low to an ambitious $650 high, reflecting deep division over Bitcoin’s medium‑term trajectory. With MSTR trading near $500 today, the midpoint of $412.80—implied by InvestingPro’s free cash flow and earnings models—suggests the stock isn’t a screaming buy but isn’t a cut‑loss candidate either. The next quarterly report on May 1, 2025, will reveal fresh data on Bitcoin gains, ATM proceeds and net working capital.
InvestingPro’s Fundraising and Fair Value Insights
InvestingPro notes that MicroStrategy raised $547.7 million through its common stock ATM and $7.8 million via STRK preferred this week. With a current ratio of 0.71 and market cap of $82.6 billion, liquidity is tight but manageable, given zero corporate debt maturities until 2026. Their deep dive pegs fair value between $412 and $429 based on conservative growth assumptions and a 10 percent discount rate.
Decision: Hold
MicroStrategy remains the world’s most levered public Bitcoin proxy, delivering unparalleled upside if BTC trends above $150,000 over the next 18 months. Yet the same leverage menaces the stock during drawdowns. With average cost basis at $67,766 and market price near $87,400 per BTC, the company boasts embedded gains but also faces potential unrealized losses should crypto markets reverse. For investors seeking a pure‑play on Bitcoin scarcity and institutional adoption, MSTR warrants a hold: maintain exposure for asymmetric upside while acknowledging significant balance‑sheet and market risks.
