MicroStrategy (MSTR), the largest corporate holder of bitcoin and long seen as a leveraged play on the cryptocurrency, has lost nearly $18 billion in market value as enthusiasm dried up and its net asset value (mNAV) premium collapsed in recent months.
The stock may be primed for a rally as a number of key catalysts could reverse the bearish trend as soon as this week, according to a new report from 10x Research’s Markus Thielen, who had previously been bearish on the name.
“At the current price, with the NAV premium all but gone, volatility trending higher, and a potential catalyst in the form of strong third-quarter earnings and renewed speculation of inclusion in the S&P 500, we view the strategy as attractive at current levels,” Thielen wrote, noting that stocks here could offer better value than bitcoin itself.
The stock’s drop below $280 (down another 1.8% on Wednesday) has left the market capitalization just above the value of bitcoin on the company’s balance sheet. That marks a sharp turnaround from late 2024, when speculative premiums, Thielen said, pushed the stock well above its fundamentals.
While the 40% drop since July has sentiment “disappeared” and retail interest is low, the company’s earnings report on Thursday could mark a turnaround, Thielen said.
He expects the company to report a gain of approximately $3.6 billion of market value gains on its BTC holdings. The gain could restore speculation about a possible inclusion decision in the S&P 500 index in December, a move to which Thielen has now assigned a probability of between 60% and 70%.
Including the stock in one of the world’s major stock indexes could generate up to $28 billion in passive and active fund flows, setting MSTR up for a rally similar to that seen in Coinbase (COIN) and Robinhood (HOOD) following their inclusions in the S&P 500.
“Capitulation always feels like the end, until it quietly marks the beginning,” Thielen said.
Read more: Saylor’s Strategy, the first Bitcoin treasury company rated by a major credit agency
