2. MicroStrategy Incorporated (NASDAQ:MSTR)
% Gain Over 6-Month Period: ~166.0%
Average Upside Potential: ~80.8%
Number of Hedge Fund Holders: 44
MicroStrategy Incorporated (NASDAQ:MSTR), doing business as Strategy, provides AI-powered enterprise analytics software and services. Maxim upped the company’s price target to $500 from $480, keeping a “Buy” rating after it announced to rebrand itself, and changing the name to Strategy. Maxim believes that it is better aligned with its dual focus as a bitcoin treasury company as well as a business intelligence software company. The firm has increased the target based on its 12-month estimated value of MicroStrategy Incorporated (NASDAQ:MSTR)’s bitcoin holdings, plus the value of the core software business. Notably, as of December 31, 2024, the carrying value of its digital assets (comprised of approximately 447,470 bitcoins) sat at $23.909 billion.
The company is at the cutting edge of innovation, championing the 2 most transformative technologies of the 21st century: Bitcoin and AI. Looking ahead, MicroStrategy Incorporated (NASDAQ:MSTR) is confident about enhancing shareholder value via the strategic initiatives in Bitcoin and AI technologies. It remains well-placed to continue growth and transformation efforts, courtesy of robust investor backing, along with a focus on value creation and transparency. Furthermore, higher institutional adoption of Bitcoin is expected to significantly benefit MicroStrategy Incorporated (NASDAQ:MSTR).
Greenlight Capital, an investment management firm, released its Q4 2024 investor letter. Here is what the fund said:
“There is an open debate as to whether Bitcoin will at some point enter the mainstream as an official currency. In fact, there is a bill before Congress for the U.S. to establish a “Strategic Bitcoin Reserve” and buy one million Bitcoins over five years. The bill’s purpose appears to be the use of public funds to ramp up the price of Bitcoin, thereby enhancing the wealth of existing Bitcoin holders. This seems a dubious use of taxpayer funds, but the new administration has a lot of Bitcoin-owning supporters, so it might happen. More likely, cooler heads will decide that the government should not borrow another trillion dollars in the bond market to speculate in Bitcoin and that there is, in fact, nothing strategic about doing so.
One of the biggest owners of Bitcoin is MicroStrategy Incorporated (NASDAQ:MSTR). While MSTR owns a small software business, its principal pursuit is buying Bitcoin. In practice, MSTR is an investment company that buys and holds Bitcoin.2 MSTR trades at a large premium to the value of the underlying Bitcoin it holds. The idea is to raise money from new investors at a premium and use the proceeds to buy more Bitcoin. Since the Bitcoin that MSTR buys costs less than the Bitcoin-implied value of MSTR’s stock, the new investment is dilutive to new investors but accretive to existing investors. MSTR’s promoters have labeled the return to existing investors created by this scheme the “Bitcoin yield”. As Bitcoin itself yields nothing, the Bitcoin yield is simply a measure of the Ponzi finance’s effectiveness. Lately, it has been pretty effective.”