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Wall Street Cheers Strategy’s $84B Bitcoin Ambition: A Risk Worth Taking?

BBG News

What to know:

  • Benchmark and TD Cowen both reiterated buy ratings, calling the new capital raise strategy ambitious but credible.
  • Strategy now targets a 25% bitcoin yield and $15B in BTC gains by 2025, up from previous projections.
  • The company has already raised $28.3B and aims to bring in another $56.7B over the next 32 months.

Behold the latest manifestation of capitalism’s exquisite, thrilling, and utterly reckless ambition: Strategy’s audacious $84 billion bitcoin expansion plan. Wall Street’s pundits, not often known for their reverence towards wild-eyed schemes, are now saluting Strategy’s move as “ambitious but credible.” So, it seems like there’s something to this madness after all. Can a gamble that will reshape financial markets in the next few years actually be credible? Maybe. Just ask Michael Saylor, the ever-enthusiastic Executive Chairman of Strategy, who believes this new plan is not just bold but a golden opportunity to wield bitcoin like a master swordsman.

Despite MSTR’s shares dancing at a price more than double the value of its bitcoin holdings, analyst Mark Palmer from Benchmark sees the gamble as “attractive.” After all, it’s not every day you get to witness a company that not only believes in its vision but also demonstrates the wherewithal to turn theoretical strategies into tangible shareholder value. Palmer’s buy rating remains steadfast, paired with a daring price target of $650. Even with bitcoin fluctuating like a pendulum, Saylor and his team are the orchestra conductors of this wild symphony. 🎻

But wait! There’s more: Strategy, during its first-quarter earnings announcement, revealed the expansion of its 21/21 plan — originally set at $42 billion — to a jaw-dropping $84 billion. TD Cowen’s Lance Vitanza was, predictably, intrigued by this boldness. He called it “aggressive, perhaps, but by no means out of the question,” as though questioning reality itself. With a market cap pushing $111 billion and more liquidity than a flooded basement, raising an additional $56.7 billion in the next 32 months doesn’t seem as outlandish as it sounds.

For those who love targets, Strategy has been kind enough to jack up its expectations: the bitcoin yield is now set at 25% by 2025 (up from a mere 15%). The company’s BTC gain goal has been raised to a cool $15 billion (from $10 billion). If anything, Strategy isn’t aiming for the stars – it’s aiming for the space station.

And so, the shares of MSTR rise 1.8% to $388 on a Friday morning, as bitcoin stagnates just below the $97,000 mark, wondering what it did to deserve such unpredictable swings. How thrilling. 💸

Earnings call highlights

“The adoption of the Bitcoin standard by more companies is beneficial, legitimizing bitcoin and attracting more capital,” said Saylor, ever the evangelist for the digital gold rush. “As more companies join, it stabilizes and drives up bitcoin’s price,” he continued. “Each market needs its own BTC companies, and as more join, it accelerates the transition to the bitcoin standard, pressuring others to join.” It’s a digital revolution. And no, it’s not a cult. Totally.

CEO Fong Li, trying to pacify those anxious about dilution, made an utterly charming pitch: “Issuing equity at greater than one times mNAV is accretive, not dilutive.” In other words, don’t worry. It’s not hurting anyone, except maybe your sense of fiscal sanity. As mNAV rises, equity issuance becomes like fixed income – at least that’s the sales pitch. It’s like selling people a dream… and a couple of IOUs on the side.

Meanwhile, CFO Andrew Kang, ever the pragmatist, acknowledged the company’s $5.9 billion unrealized loss in the first quarter due to bitcoin’s price decline, but was unperturbed: “Despite the volatility, we believe the transparency is vital… We expect more positive swings over time, aligning with our long-term strategy.” So, the company just weathered a financial storm, and Kang’s like, “It’s fine, we’ll ride the wave. What’s the worst that could happen?”

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2025-05-02 18:18

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