Jefferies analyst Brent Thill has downgraded software giant MicroStrategy to "underperform" from "hold" due to the continued fall in the crypto market and failure to show strong signs of recovery.
The downgrade categorizes the performance from 'hold' to underperform" following the share price target being reduced to $180. Following the news and falling Bitcoin prices have pushed Microstrategy's share price down over 10% to $237.
With a total market cap of $2.8 billion, MicroStrategy currently holds 129,200 BTC worth approximately $2.7 billion. After spending nearly $4 billion to build up its savings, the NASDAQ-listed giant had an unrealized loss of $1.3 billion.
The downgrade was reportedly due to aggressive bitcoin bets from the firm as well as a projected slowdown in its core business. At the height of the selling pressure in June, the firm denied rumors that it would face a margin call on a $205M bitcoin-backed leveraged loan position.
Even before Jefferies analysts announced the downgrade, Wall Street analysts were already pessimistic about the firm's future amid the ongoing market slump. StockNews.com rated shares of MicroStrategy to a “sell” rating in a research report on Saturday, July 2nd, and TheStreet downgraded the company's stock rating from “c-” to “d+” on May 9th.
The latest price decline comes amid significant pressure on crypto-related stocks. Among them, publicly traded crypto exchanges have suffered a fall.
