Intellifinance has learned that Bernstein Securities issued a research report stating that it gives MicroStrategy (MSTR.US) an "outperform" rating with a target price of $2,890. The bank believes that Microstrategy is not only a software company that diversifies its corporate funds into cryptos, but also a pioneer in the bitcoin capital markets.

Analysts Gautam Chhugani and Mahika Sapra wrote that "MicroStrategy is the only company with a need for convertible bonds linked to bitcoin."

The analyst pointed out that so far, MicroStrategy has raised $4 billion in convertible bonds, with the sole purpose of buying more bitcoin. Convertible bonds are a type of debt security that can be converted into stock. Michael Saylor's company currently holds 214,400 bitcoins worth about $14.5 billion. The company began buying cryptos as reserve assets in 2020. "No other company has a positive bitcoin investment strategy that can attract large-scale capital," the report said.

The report stated that MicroStrategy's long-term convertible debt strategy means that it has enough time to benefit from potential bitcoin gains, while the liquidity risk of cryptos on its balance sheet is limited.

Bernstein pointed out that when bitcoin rises, the company has more room to issue new bonds, while when cryptos fall and leverage rises, the company can issue new shares to reduce leverage.

The report stated that by using a combination of equity and debt, Microstrategy's bitcoin value per share has increased by nearly 67% in the past four years.

Bernstein pointed out that since buying cryptos in 2020, MicroStrategy has not sold any bitcoins and expects the company to continue raising funds to increase its reserves.