Investment bank TD Cowen: MicroStrategy premium is "reasonably transparent," MSTR is expected to reach $680.

Currently, many analysts believe that MicroStrategy's stock premium is unreasonable and very risky, but investment bank TD Cowen not only doesn't call it expensive but also considers its stock price premium "reasonable and logical." What exactly is MicroStrategy relying on to keep the market buying? (Background: MicroStrategy increased its holdings by $740 million in Bitcoin, bringing its total holdings close to 610,000 BTC, and MSTR has risen 50% this year.) (Background Supplement: MicroStrategy spent $470 million to increase its holdings by 4,225 Bitcoins, with unrealized gains of $30 billion! MSTR's market capitalization broke $120 billion.) In any discussion about Bitcoin on Wall Street, MicroStrategy (formerly MicroStrategy) stands out like a prominent lighthouse: it hasn't gained attention through its original software business but rather through its continuously expanding Bitcoin inventory that attracts global attention. However, there are doubts from the outside about whether the premium of MicroStrategy's stock MSTR is an extension of the "greater fool theory." Yet, investment bank TD Cowen directly responded: "Calculating MSTR as a simple Bitcoin net value is logically flawed." TD Cowen breaks down MicroStrategy's "capital flywheel." According to a report by The Block on July 22, TD Cowen believes that MSTR's premium is composed of three parts: 1) avoiding Spot ETF management fees; 2) continuously increasing the Bitcoin content per share; and 3) the market's trust in management's leveraged operations. MicroStrategy has implemented a common stock issuance plan "42/42," combining multiple preferred stocks and convertible bonds, such as the latest STRC issuance, which has pushed the fundraising cost down to 0.421%: almost all funds are used to buy Bitcoin, which has instead pushed up the corresponding BTC holdings per share, increasing by 20.8% since the beginning of the year. The flywheel continues to turn. Last week, MicroStrategy added another 6,220 Bitcoins, bringing its total holdings to 607,770. TD Cowen estimates that by 2027, MicroStrategy's Bitcoin holdings could approach 900,000 BTC. Additionally, TD Cowen stated that if Bitcoin reaches $155,000 by the end of the year, MSTR's target price will be at least $680, with still room for upward adjustment. Michael Saylor's financial engineering. TD Cowen defines MicroStrategy as a "high-leverage Bitcoin asset management platform." According to data from The Block, MicroStrategy can obtain cheap funds using preferred stocks and convertible bonds with about 8%–10% dividends, which these tools are like buying call options for retail investors. When BTC rises by 20%, MSTR's stock price could theoretically amplify to 60%. However, TD Cowen pointed out that although leverage has amplified fluctuations, the SEC's regular disclosures and strict audits provide transparency for institutions. Premium controversy and risks. However, it is worth noting that opposing voices focus on two points: first, MicroStrategy's software core business has weak profitability, and MSTR has almost become a pure Bitcoin speculation tool; second, high leverage implies liquidity pressure. Tradingnews reminds that once Bitcoin drops sharply, MicroStrategy's interest and principal due may force the company to sell BTC. Current status of MSTR's stock price. Price movement is the most direct way to test the premium. According to Google Finance data, as of July 23, after hours in U.S. stocks, MicroStrategy's stock price is reported at $426, down 0.98% during the session. However, so far this year, with the rise of Bitcoin, MicroStrategy's stock price has surged from $289, up 46%, with a market capitalization reaching $119.8 billion. Related reports. Ethereum version of MicroStrategy Q&A: Analysis of four major U.S. companies betting on ETH logic and holdings. Is there a DeFi version of MicroStrategy being born? A $2 million capital gamble and board defense battle. U.S. pharmaceutical company Windtree Therapeutics plans to establish a "$200 million BNB reserve," CZ calls: More BNB MicroStrategy is coming. <Investment Bank TD Cowen: MicroStrategy's premium is "reasonable and transparent," MSTR looks up to $680> This article was first published in BlockTempo, the most influential blockchain news media.