TechFlow news, October 18 — According to CoinDesk, venture capital firm Benchmark stated in a research report today that MicroStrategy (MSTR) is valued higher relative to its holdings of bitcoin, causing the market to bearish on the company's high stock price and overlook its "unique" shareholder value. MicroStrategy’s net asset value (NAV) is calculated by dividing MSTR’s market capitalization by the value of its bitcoin holdings. The NAV premium recently hit a record high of 2.5 times its bitcoin holdings, with the company’s market cap exceeding $41 billion while its bitcoin holdings are worth approximately $17 billion. Benchmark analyst Mark Palmer wrote: “We believe MSTR can use what management calls ‘intelligent leverage’ to generate compounding returns on its bitcoin holdings, differentiating its stock from other ways of gaining bitcoin exposure, such as spot bitcoin ETFs.” Palmer reiterated his buy rating and raised MicroStrategy’s price target from $215 to $245. As bitcoin rose to $68,400, MSTR shares climbed 6.6% on Friday to $206.19. Palmer believes the value of the company’s bitcoin holdings and software business will continue to grow, and considers the company’s high stock price justified, as it offers more than just holding a large amount of bitcoin.
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