Strategy stock price made a strong bullish breakout on Monday as Bitcoin continued surging and hitting its all-time high. MSTR jumped to $450, its highest point since November last year, and 96% above its lowest point in April. This article assesses the potential MicroStrategy stock target if its net asset value (NAV) were to match that of MetaPlanet.
Strategy Stock Price is No Longer Correlated With Bitcoin
Strategy, formerly known as MicroStrategy, has become one of the biggest American companies with a market capitalization of over $126 billion. It currently holds 601,550 coins, valued at over $72 billion.
For a long time, MSTR stock and Bitcoin were highly correlated, a situation that has ended this year. For example, while Bitcoin price is hovering near its all-time high, Strategy remains 16.6% below its highest point in November last year.
This performance is mostly because of the rising concerns about Strategy’s dilution, as it has continued to issue stock to buy Bitcoin. As a result, its outstanding shares have jumped from 72 million in 2020 to over 246 million today, a 241% surge.
Strategy plans more dilution over time as it is in the process of raising $84 billion, which it intends to use to buy more Bitcoins. Proponents believe that this is a good form of dilution, citing its valuation growth from $1 billion in 2020 to over $126 billion.
READ MORE: MSTR Stock Analysis: Where Will Strategy Shares Be in 2030?
MSTR Stock if it Hits MetaPlanet’s NAV
MetaPlanet, like Strategy, has also adopted a Bitcoin accumulation approach over the past few years. It now holds 16,352 coins valued at over $1.96 billion.
Its accumulation has made it the best-performing company in Japan, with a market capitalization of $6.5 billion as of today.
The implication of all this is that MetaPlanet trades at a higher premium than Strategy. In this, it trades at a 3.24 premium. This means that its current valuation is 3.2x that of its Bitcoin holdings.
Strategy’s NAV multiple has been in a downward trend in the past few months, such that it stands at 1.755. Therefore, if MSTR stock rallied and attained MetaPlanet’s NAV, its stock would be worth about $826, much higher than the current $450.
This view assumes that the Strategy stock price will rally and bridge the gap with MetaPlanet, but this is not guaranteed. To the contrary, there is also a likelihood that it is MetaPlanet whose NAV will drop, as concerns about its valuation remain.
READ MORE: Metaplanet Issues $13.4M in Bonds to Purchase Additional Bitcoin
