What Happened?
Shares of business analytics software company MicroStrategy (NASDAQ: MSTR) jumped 3% in the pre-market session after investment firm Cantor Fitzgerald reiterated its 'Overweight' rating and increased its price target on the stock. The firm lifted its price target to $680 from $614, reflecting continued confidence in the company's market performance. An 'Overweight' rating typically functioned as a recommendation to buy the stock. This move came amid broader positive sentiment for the company, whose strategy centered on the aggressive acquisition of Bitcoin. The upward momentum was also supported by a rise in the price of Bitcoin itself, which traded higher during the period. Investor confidence in the company's crypto-focused strategy underpinned the stock's advance ahead of its upcoming quarterly earnings report.
After the initial pop the shares cooled down to $406.66, up 0.3% from previous close.
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What Is The Market Telling Us
MicroStrategy’s shares are extremely volatile and have had 79 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 3.5% on the news that the price of its key asset, Bitcoin, surged to a new all-time high, after the company announced it had purchased more of the cryptocurrency. The enterprise software company, which has famously made holding Bitcoin a core part of its corporate strategy, saw its shares climb in tandem with the world's largest cryptocurrency. Bitcoin's price soared past the $122,000 mark, continuing a powerful rally. This upward momentum in the crypto market directly benefits MicroStrategy, as the value of its substantial Bitcoin treasury increases.
Adding to the bullish sentiment, MicroStrategy disclosed in an SEC filing that it had purchased an additional 4,225 bitcoins for approximately $472.5 million between July 7 and July 13. The move reaffirmed the company's aggressive strategy of using its balance sheet to accumulate the digital asset, a practice that has closely tied its stock performance to Bitcoin's price fluctuations.
MicroStrategy is up 35.5% since the beginning of the year, but at $406.66 per share, it is still trading 14.2% below its 52-week high of $473.83 from November 2024. Investors who bought $1,000 worth of MicroStrategy’s shares 5 years ago would now be looking at an investment worth $34,518.
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