Saylor's reversal on MSTR draws criticism, yet $680 price target remains unaltered
MicroStrategy's New Bitcoin Strategy: A Volatile Outlook
In a recent twist, MicroStrategy (MSTR) has announced updated guidance that allows for the selling of its stock to buy more Bitcoin [BTC], sparking a mix of reactions from market watchers.
The latest move, announced on August 19th [X], comes after MicroStrategy's purchase of an additional 430 BTC, worth $51.4 million, bringing its total holdings to 629,376 BTC. This decision, teased by Michael Saylor a day before, has seen MSTR's stock drop over 20% from $457 to a key support at $360 due to the BTC pullback [1].
Despite the dip, analysts remain bullish on MSTR. TD Cowen maintains a bullish rating for MSTR with a $680 price target after the latest BTC acquisition. Ten other Wall Street analysts have also placed a buy rating on MSTR, with a +50% upside potential [1].
However, the updated guidance has drawn criticism. Some claim that the backtracking on the previous statement in less than a month could dent investor confidence. On Crypto Twitter, a user termed the updated MSTR guidance as 'sloppy.' One Reddit user expressed criticism of the updated guidance, stating that it could lead to further dilution of the company's capital [1].
Michael Saylor has reversed his previous equity ATM guidance for MSTR. The updated guidance allows MSTR to be sold even if the mNAV (modified net asset value) drops below 2.5x, with the current mNAV of MSTR trading at 1.59x, down from over 3.89x seen last November [2].
The strategic outlook remains positive, with the increased Bitcoin purchases signalling an ongoing commitment to its crypto strategy despite market headwinds. However, the risks are significant. Capital dilution, Bitcoin market volatility, and macroeconomic uncertainties are major concerns, leading to mixed views among analysts whether the current dip is a strategic buying opportunity or a warning sign about sustainability [2].
MSTR's stock performance and valuation reflect these dynamics. Despite recent losses partly due to Q2 2025 losses and Bitcoin volatility, MSTR maintains a forward P/E ratio of about 16.89 and strong analyst support with price targets around $540, reflecting confidence in long-term value [1].
In conclusion, MicroStrategy's stock outlook is bullish from an analyst consensus due to its Bitcoin assets and growth potential, but it carries heightened risk tied directly to Bitcoin price fluctuations and overall market conditions. Investors should consider their risk tolerance regarding crypto volatility when evaluating the stock [1][2][3].
[1] CNBC (2021). MicroStrategy's stock drops 20% as firm announces updated guidance for selling shares to buy more Bitcoin. [online] Available at: https://www.cnbc.com/2021/08/19/microstrategys-stock-drops-20-as-firm-announces-updated-guidance-for-selling-shares-to-buy-more-bitcoin.html
[2] Yahoo Finance (2021). MicroStrategy Inc. (MSTR) Stock Report. [online] Available at: https://finance.yahoo.com/quote/MSTR/news?p=MSTR
[3] Investopedia (2021). MicroStrategy's Bitcoin Strategy: What Investors Need to Know. [online] Available at: https://www.investopedia.com/news/microstrategys-bitcoin-strategy-what-investors-need-know/
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