MicroStrategy Shares Surge as Michael Saylor Puts Full Focus on Bitcoin

MicroStrategy (MSTR) stock is up nearly 15% on Wednesday, helped by a modest rally in bitcoin (BTC) and news from last night that Michael Saylor will move to the newly-created executive chairman role and elevate president Phong Le to CEO.

The management changes will allow for the company’s enterprise business to have the full focus of the CEO, with Saylor devoting his energies to strategies for corporate bitcoin adoption.

“In my next job, I intend to focus more on bitcoin,” Saylor tweeted early Wednesday in a tongue-and-cheek response to those who think the moves might mean he’s grown less bullish on the crypto.

Meanwhile, Le said investors shouldn’t expect any surprises in strategy. On the company’s earnings call late Tuesday, Le said that he’s been aligned with Saylor on the enterprise and bitcoin strategy throughout their time together. The changes, he said, will free up time for him to run the company. “I would sort of see this as a business as usual transition,” Le told analysts.

“We think this transition was underway for quite some time with Mr. Le’s appointment as president two years ago,” Joe Vafi, an equity research analyst with Canaccord Genuity told clients in a note Wednesday. “Overall, we don’t expect any material change in the strategic direction of the company.”

Vafi rates MicroStrategy with a buy, though he did trim his price target to $372 from $453 (current price is $317). MicroStrategy stock, said Vafi, is the “most streamlined play” for equity investors to gain bitcoin exposure in the public markets.

Of last quarter’s $917.8 million impairment charge on bitcoin holdings during the second quarter, it’s “essentially meaningless,” said BTIG analyst Mark Palmer, noting it has no impact on the company’s inherent value. “That value can be easily ascertained as it stems from just two sources,” said Palmer. “The market value of MSTR’s bitcoin holdings and the value of its enterprise analytics software unit.” Palmer reiterated his buy rating and $950 price target.