A Fresh Look at MicroStrategy (MSTR) Valuation After Major Euro Preferred Raise for Bitcoin Expansion

Strategy (MSTR) has just wrapped up a major euro-denominated perpetual preferred stock offering targeted at European investors. The company raised funds earmarked for more Bitcoin acquisitions and for supporting its balance sheet. This move comes as Bitcoin prices face renewed pressure.

See our latest analysis for Strategy.

Strategy’s latest fundraising drive follows a tough stretch for its common stock, with a 1-day share price return of 1.99% offering a small reprieve after weeks of declines. Despite blockbuster Q3 earnings and steady guidance, the share price has slid to a fresh 52-week low as Bitcoin’s drop and new financing rounds weigh on sentiment. Yet, while MSTR’s share price return is down 19% year-to-date and 10% over the past year, total shareholder returns are still up massively over three and five years. This reminds long-term holders just how dramatic the run-up since 2020 has been, even if momentum has clearly faded for now.

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With Strategy’s bold expansion of its capital-raising strategy and the share price at multi-year lows, is this just short-term noise or the sign of a company whose future growth is already reflected in the price?

Most Popular Narrative: 63.5% Undervalued

With the narrative's fair value pegged at $663 per share and Strategy's last close at $241.93, user BlackGoat sees considerable upside based on ambitious capital plans and Bitcoin exposure. The stage is set for a deeper look at the narrative's core assumptions.

MicroStrategy’s ambitious "21/21 Plan" aims to raise $42 billion over the next three years, split evenly between equity offerings and fixed-income securities. The capital will be used to purchase additional Bitcoin, targeting holdings of over 386,700 BTC by 2027. This plan reflects the company’s commitment to aggressive Bitcoin accumulation and its confidence in the cryptocurrency’s long-term value.

Read the complete narrative.

What hidden levers fueled that massive price target? The fair value rests on exponential crypto acquisition and razor-sharp projections, with numbers bold enough to challenge industry norms. Can you guess the pace of Bitcoin accumulation, or just how fast revenue might climb? The answers may surprise you if you dive in.

Result: Fair Value of $663 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, challenges remain. Rising competition among Bitcoin treasury firms and the risk of a sudden reversal in market sentiment could quickly undermine the bullish thesis.

Find out about the key risks to this Strategy narrative.

Build Your Own Strategy Narrative

If this narrative does not quite fit your outlook, why not dive into the numbers and craft your own view in just a few minutes? Do it your way

A great starting point for your Strategy research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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