Saylor’s MSTR U-turn sparks criticism, but $680 target remains untouched
MSTR has dropped 20% but analysts projected that it could recover and rally over 50%.
Key Takeaways
Critics have slammed Saylor’s ‘sloppy’ guidance reversal, but Wall Street analysts remain optimistic about MSTR. Will the stock hold above the 200-day Simple Moving Average (SMA)?
Michael Saylor has made a U-turn on his previous equity ATM (at the market) guidance, with the latest one allowing selling of MSTR stock for more Bitcoin [BTC] buys even if the premium falls lower.
In an X (formerly Twitter) post on the 19th of August, Saylor noted that the move would help Strategy (formerly MicroStrategy) to drive its capital plan for BTC.
“Strategy today announced an update to its MSTR Equity ATM guidance to provide greater flexibility in executing our capital markets strategy.”
Saylor’s move sparks division
Unlike the instruction issued early in August, the firm will sell MSTR even if the mNAV (modified net asset value) drops below 2.5x to fund BTC buys.
For the unfamiliar, mNAV is the premium or discount at which a stock trades against its crypto holdings. It’s a key valuation metric for crypto treasuries.
Currently, MSTR’s mNAV trades at 1.59x, down from over 3.89x seen last November.
However, the latest guidance has split market watchers. Critics claimed that backtracking on the previous statement in less than a month would dent investor confidence. One Reddit user said,
“For me, this whole mNAV guidance stuff left a bad taste when it was released, and now even more so with the backtracking. Not a good look and does not give me any confidence as a stockholder.”
On Crypto Twitter, the sentiment was also negative, with one user terming the move as ‘sloppy.’
However, a pro-MSTR analyst, Jeff Walton, clapped back at critics, stating that by October, the FUD will have dissipated.
That said, Strategy bought another 430 BTC (worth $51.4 million), bringing its overall holdings to 629,376 BTC (worth about $74B).
The latest purchase wasn’t surprising since he had teased about it a day before.
Meanwhile, MSTR has dropped over 20% from over $457 to a key support at $360 amid BTC pullback.
But TD Cowen maintained a bullish rating with a $680 price target after the latest BTC acquisition. In fact, ten other Wall Street analysts had placed a buy rating on the stock, with a +50% upside potential.
