Investment banking firm Jefferies downgraded the MicroStrategy stocks from “hold” to “underperform.”

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Fast facts

  • MicroStrategy, the largest corporate holder of Bitcoin, has a premium valuation for a low-growth asset, Jefferies said in a research report released on Tuesday.
  • Jefferies kept the MicroStrategy price target unchanged at US$180, while the stocks fell by over 10% on Tuesday to US$237.64. 
  • With 129,200 Bitcoins, 52% of MicroStrategy’s enterprise value of US$2.8 billion is comprised of Bitcoin, according to the investment banking firm. 
  • This indicates an unrealized loss of over US$1 billion on a US$3.97 billion investment, Jefferies said. 
  • Jefferies said that MicroStrategy’s stock trades at a premium compared to other companies and the downgrade is due to the slowdown in billings growth and the business intelligence arm of MicroStrategy. 
  • Jefferies expects MicroStrategy’s revenue to grow by 4% in the next quarter. 

See related article: MicroStrategy posts Q1 revenue loss amid falling Bitcoin price