In a rare move, Cantor Fitzgerald slashed its target price for MicroStrategy (MSTR-US) by nearly 60%—from $560 to $229—yet still reiterated an "overweight" rating. The decision highlights Wall Street’s unusual confidence in the company despite sharp declines in both its stock and Bitcoin, the digital asset that underpins its strategy.
Target Price Halved, Rating Intact
MicroStrategy shares fell 3.77% to $178.99 on Friday (Dec. 5), extending a year-to-date decline of 38%. The drop reflects weaker Bitcoin prices and concerns about potential removal from the MSCI index. Typically, a halved target price signals caution, but Cantor Fitzgerald urged investors to ignore panic, calling its stance a deliberate contrarian move.
Barron’s noted that since recommending a sell last December, MicroStrategy’s stock has plunged 54%. Yet analysts argue the company’s unique positioning as a "digital asset vault" justifies continued optimism.
Bitcoin Dependency
MicroStrategy has largely abandoned its software roots, focusing instead on holding approximately $60 billion worth of Bitcoin. At its peak, the stock traded at a premium well above the value of its holdings. But with Bitcoin down 28% from October highs, that premium has narrowed.
Cantor analysts Brett Knoblauch and Gareth Garcetta stressed that MicroStrategy’s future is tied directly to Bitcoin’s trajectory. They remain bullish, viewing Bitcoin as a potential global reserve asset.
Correction, Not Collapse
Despite recent volatility, analysts see Bitcoin’s decline as a healthy correction, not the start of another "crypto winter." They argue that only a major shock—like the Fed’s 2022 rate hikes—could trigger a sustained downturn.
Concerns that MicroStrategy might be forced to sell Bitcoin to cover debt or dividends appear overstated. With $8.2 billion in nominal debt, analysts say the company’s holdings far outweigh obligations. Unless Bitcoin were to fall another 90%, forced sales are unlikely.
Strategic Buying Patterns
Observers note that MicroStrategy has not added to its Bitcoin stash during the latest decline. Analysts explain the company only buys when conditions enhance its share price premium, suggesting discipline rather than weakness.
Cantor’s drastic target cut reflects the narrowing premium and weaker Bitcoin prices, but analysts insist the long-term thesis remains intact.
Broader Wall Street Sentiment
MicroStrategy continues to enjoy strong support. Of 18 institutions surveyed by FactSet, 16 maintain a "buy" rating or equivalent, with an average price target of $508.43. Even in a bearish environment, outright negative calls remain scarce.
The Bottom Line
MicroStrategy’s fate is inseparable from Bitcoin. While Cantor Fitzgerald’s halved target price reflects near-term headwinds, its "overweight" rating underscores Wall Street’s conviction that Bitcoin’s long-term trajectory remains upward. For investors, the message is clear: volatility may persist, but MicroStrategy is still viewed as a leveraged bet on digital assets.