Clear Street Starts Coverage on MicroStrategy with Buy Rating, Sees Unique Bitcoin Upside

Clear Street initiated coverage on MicroStrategy (NASDAQ:MSTR) with a Buy rating and a $422 price target, highlighting the company’s distinct approach to leveraged Bitcoin exposure as a key differentiator from traditional crypto investment vehicles like ETFs.

Unlike passive instruments, MicroStrategy actively amplifies its Bitcoin holdings through strategic use of convertible debt, preferred equity, and timely equity offerings. This aggressive strategy has allowed the company to boost its Bitcoin-per-share metric—even after accounting for dilution. Over the last 12 months, this dynamic helped MicroStrategy outperform Bitcoin itself by 54 percentage points.

The report also points to the company’s treasury operations, which are forecast to increase Bitcoin per share by 15% annually over the next two years. That growth, net of dilution, is viewed as economically similar to EPS growth, warranting a forward multiple of approximately 9x applied to incremental BTC-per-share gains.

However, Clear Street cautions that MicroStrategy’s strategy is a double-edged sword. If Bitcoin adoption weakens or its price declines, the company’s leverage could magnify losses. Additionally, any limitations on access to capital markets could hamper its ability to expand BTC holdings and generate future yield.