Key points:
- MicroStrategy’s unjustifiable premium to Bitcoin highlighted
- MicroStrategy’s stock fell 14% after report
Kerrisdale Capital has published a report on MicroStrategy Incorporated, indicating a pessimistic view on the company’s stock. The report suggests that MicroStrategy’s stock is trading at an unjustifiable premium to Bitcoin, the digital asset that significantly contributes to its value. The firm believes that the relationship between Bitcoin and MicroStrategy has become distorted and predicts that the current inflated premium will contract.
The report also emphasizes that MicroStrategy’s software analytics business only represents about 3% of the company’s total enterprise value. Kerrisdale Capital argues that the reasons provided for MicroStrategy’s premium are weak. The firm also stated that the surge in MicroStrategy shares due to the rise in Bitcoin’s price is not sustainable.
Following the release of Kerrisdale Capital’s report, MicroStrategy’s stock fell, with a decrease of 14%. Despite this recent selloff, the stock has nearly tripled in value this year. MicroStrategy has not yet responded to the disclosure of Kerrisdale Capital’s short position in the company.
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