TD Cowen explained the "overvalued" stock price of Strategy

TD Cowen analysts called the arguments of critics regarding the inflated value of Strategy's shares "logically flawed," reports The Block.

In their opinion, the company's strategy of issuing securities and attracting capital does not dilute but rather increases the share of Bitcoin per investor.

The premium to the net asset value of the Strategy is 72.6%. This is the difference between the market capitalization of $124.3 billion and the value of the bitcoins on the company's balance sheet of $72 billion.

Critics refer to this as the "greater fool theory." They believe that investors are overpaying for stocks in hopes of selling them for an even higher price. Analysts at TD Cowen disagree with this — the premium is justified by MSTR's ability to attract cheap capital for purchasing bitcoin, creating yields unavailable to retail investors.

As an example, they cited a recent transaction. Strategy sold shares for $739.8 million and used that money to buy 6220 BTC. As a result, the Bitcoin share per MSTR increased by 20.8% since January 1 and more than doubled over the last 18 months.

The company continues to raise funds. Recently, it launched the fourth series of perpetual preferred shares for new cryptocurrency purchases.

The company already owns 607,770 BTC and remains the largest public holder of Bitcoin. TD Cowen predicts that by the end of 2027, the company will accumulate nearly 900,000 BTC, 4.3% of the total issuance of digital gold.

Source: Bitcoin Treasuries.Remind that the investment bank raised the target price of Strategy shares from $590 to $680 and forecasted Bitcoin at $155,000 by the end of the year.