Investing.com — Citron Research has expressed concerns about MicroStrategy’s current valuation, even as the software company’s shares have seen exponential growth fueled by its strategy.
In a tweet on Thursday, the research firm reflected on its 2020 endorsement of MicroStrategy as a Bitcoin proxy investment, recalling a $700 price target when the shares were trading at $200.
Fast forward to today, MicroStrategy’s price has risen well above the company’s pre-stock split price target, which Citron says is a testament to founder Michael Saylor’s bold Bitcoin-centric approach.
“Nearly four years ago, Citron was the first to tell readers that MicroStrategy was the ultimate way to invest in Bitcoin, setting a goal of $700,” Citron tweeted, acknowledging Saylor’s foresight in adopting the cryptocurrency.
However, Citron now views MicroStrategy’s valuation as “overheated” and has hedged with a short position in the stock.
Despite maintaining a bullish stance on Bitcoin itself, the company highlighted that MicroStrategy’s trading volume has become increasingly disconnected from the cryptocurrency’s fundamentals.
“With investing in Bitcoin easier than ever (ETFs, $COIN, $HOOD), $MSTR volume has completely disconnected from BTC fundamentals,” Citron wrote, indicating what they see as an overvaluation of the stock .
While praising Saylor’s leadership, Citron emphasized his cautious view on the stock, noting, “Much respect for @saylor, but even he should know $MSTR is overheated.”
