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MicroStrategy Stock (MSTR) Trades at High Premium’ Over Bitcoin

The Kerrisdale investment company claims that the software firm’s stock will be badly impacted due to its unfounded price.

MicroStrategy stock is experiencing a protracted spell of success, attaining new highs as Bitcoin’s price increases. The ‘Bitcoin development firm’ stock is currently priced at $1746 for every share, a year-to-date gain of 615%. The price has since declined to $1704.56. 

Nevertheless, in a new report, Kerrisdale Capital, an investment management company, said it is due for a price drop. Called ‘Know When to HODL, Know When to FODL,’ the company claimed that MSTR’s price is no longer reasonable compared to Bitcoin.

MicroStrategy Stock Price Riding on Unreasonable Premium to Bitcoin

The report notes they are long Bitcoin and short shares of MicroStrategy, a Bitcoin proxy, which operates at an unreasonable premium to the digital asset that enhances its value. Further, it reveals that the times when MicroStrategy shares represented an infrequent and unique means to acquire Bitcoin access ended.

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In 2020, the software company began aggressively purchasing Bitcoin. It is the biggest corporate holder of this cryptocurrency, with 214,246 coins worth more than $15B. 

Michael Saylor, the co-founder and chairman, has often claimed that purchasing MSTR stock offers investors exposure to Bitcoin reliably and safely compared to direct ownership of the digital coins or investment in recently sanctioned exchange-traded funds.

Further, he notes that MSTR’s lack of management fees makes it a perfect deal. According to Kerrisdale’s report, the pitch is unfair.

Securities Regulator Approved Spot Bitcoin ETF, Boosting BTC Accessibility

In January, the United States Securities and Exchange Commission (SEC) ratified several spot Bitcoin exchange-traded funds, offering conventional investors the capability to purchase shares that monitor the price of the cryptocurrency trading on a structured stock exchange. The products have had major success, with significant influxes to the funds, and some have low fees.

Bitcoin is accessible via crypto exchanges, brokerages, reduced-fee ETPs, and exchange-traded funds (ETFs). Purchasing Bitcoin is a better gamble. According to the SEC, the appreciation of Bitcoin price has significantly impacted shareholder value creation. 

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CoinGecko data shows that Bitcoin’s price is up almost 3%, trading for $70784 for each coin. Earlier in March, it attained an all-time high of nearly $74000. In the meantime, MSTR is down almost 10%. 

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Stephen Causby

Stephen Causby is an experienced crypto journalist who writes for Tokenhell. He is passionate for coverage in crypto news, blockchain, DeFi, and NFT.

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