Bitcoin treasury pioneer MicroStrategy’ s upbeat financial results Wednesday night has invigorated Wall Street about the direction of its unique crypto bet. The fourth quarter was “one for the record books,” said Canaccord Genuity’s Joseph Vafi. The company, which will now be known as Strategy, announced its name and logo change along with the results. During the quarter, it made its largest-ever increase in bitcoin holdings, adding 195,250 bitcoins. The company reached a BTC yield of 48% in the fourth quarter, compared with 5.1% in the third quarter. It also got ahead of schedule on its three-year plan to raise $42 billion – $21 billion in equity and $21 billion in fixed income – and buy an equivalent amount in bitcoin. In the fourth quarter, it issued $16.7 billion in equity – about 80% of the $21 billion target – and $3.6 billion in fixed income securities. Management said that as a result, the company will emphasize fixed income issuance this year. “While some may see the company’s BTC acquisition strategy as risky, we see an emerging and rational cadence to acquisition activity here: exploiting periods of very high demand with heightened acquisition activity, while still consistently being buyers during periods of more normalized demand,” Vafi said. The company also introduced two new metrics to gauge its ability to acquire bitcoin in an accretive manner: BTC Gain, which is the number of bitcoins the company has at the beginning of a period multiplied by the BTC yield for the period; and BTC $Gain, which takes the BTC Gain metric and translates its value into dollars based on the market price of bitcoin as 4 p.m. ET on the last day of the quarter. Strategy guided to $10 billion of BTC $Gain for 2025, compared with $13 billion last year. “Given the significant number of BTCs that MSTR holds, the BTC gain of $10bn is nominally very large,” said Mizuho’s Dan Dolev, who has an outperform rating on the stock. “This is evidence of MSTR’s first mover advantage and scale relative to other companies that may attempt to deploy similar BTC strategies.” Cantor Fitzgerald’s Brett Knoblauch noted the company would need to raise about $19 billion at a premium of 110%, which he said is doable. “With our view that 2025 will be a good year for bitcoin (both seasonality and regulatory/political tailwinds), we believe this is feasible,” he said. “If we treat BTC $Gain as earnings, MSTR would currently be trading at less than 10x earnings, which we argue is what a lot of the Street is missing about MSTR’s capital markets flywheel.” Knoblauch reiterating his overweight rating on the stock and raised his price target to $619 from $613. Cannacord’s Vafi maintained his buy rating but lowered his price target to $409 from $510. —CNBC’s Michael Bloom contributed reporting.
