Analysis: MSTR's stock price is not reasonable as it is 256% premium compared to its Bitcoin holdings

On November 21, BitMEX Research posted on social media that the current stock price of MicroStrategy (MSTR) is significantly higher than the value of its Bitcoin holdings, with a total dilution premium of about 256%. Part of the reason may be that some financial regulators prohibit people from buying Bitcoin ETFs. However, investors are very eager for exposure to Bitcoin, so they buy MSTR regardless of the premium.

In addition, MSTR has a "profit strategy" in place. Because MSTR trades at a premium, the company can issue new shares and buy more Bitcoins. This would increase the amount of Bitcoin held per share. If premiums continue to exist, the company can continue to issue new shares.

The current premium rate for MSTR is 256%. Based on this premium calculation when each share of MSTR actually represents $474 worth of bitcoin holdings; MicroStrategy will need to issue 157 million shares (currently it's 102 million), raising $157 billion dollars with stock prices rising to $1,685 per share and market capitalization reaching $674 billion while holding 1.9 million bitcoins.

BitMEX Research believes such price performance and growth model is akin to a "Ponzi scheme", which isn't reasonable.