MicroStrategy's Euro-denominated preferred shares surge by 700 million! TD: Bitcoin could reach 160,000 by the end of the year

TD Cowen’s latest report under Dimon Securities shows that MicroStrategy issued its first euro-denominated preferred stock (STRE), which can use the net proceeds from this fundraising to acquire approximately 6,720 more bitcoins. The firm reiterates a base case bitcoin price of $141,277 by the end of the year, with a bull case reaching $160,000.

Euro Preferred Stock Opens New Battlefield to Increase Holdings by 6,720 Bitcoins

(Source: MicroStrategy)

TD Cowen analysts state that MicroStrategy issued €620 million (about $715 million) in STRE preferred stock. After deducting related expenses, the company expects to deploy most of the net proceeds—approximately €608.8 million—to buy bitcoins at an average price of about $104,500. At this price, MicroStrategy could add roughly 6,720 bitcoins, pushing its total holdings beyond 648,000.

The issuance of euro-denominated preferred stock marks a significant innovation in MicroStrategy’s financing strategy. Previously, the company mainly raised funds through USD-denominated preferred stocks and convertible bonds. This marks its first entry into the euro market, indicating an effort to expand its global capital sources. European institutional investors have strong demand for fixed-income products, and MicroStrategy’s preferred stocks offer an indirect way to participate in the bitcoin narrative while enjoying fixed dividend protections.

Analysts believe that the strategy of raising funds via preferred stock issuance and then using the proceeds to buy bitcoin remains a key driver for MicroStrategy’s increasing bitcoin holdings per share. This creates a self-reinforcing cycle: Preferred stock issuance → Bitcoin purchase → Bitcoin appreciation → Company valuation increase → Ability to issue new preferred stock under better terms → More bitcoin acquisitions. As long as bitcoin prices trend upward, this cycle can continue.

The preferred stock issuance is expected to boost MicroStrategy’s bitcoin return since the beginning of the year to over 27%, approaching the company’s annual target of 30%. This return metric is a core KPI (Key Performance Indicator) for MicroStrategy’s strategic success. It not only reflects bitcoin price movements but also the growth in bitcoin holdings per share achieved through financing and accumulation strategies. Even if bitcoin prices stagnate, as long as MicroStrategy continues to accumulate, the return will keep rising.

Euro Preferred Stock Financing Structure

Issuance Size: €620 million (~$715 million)

Net Proceeds: approximately €608.8 million (after expenses)

Expected Bitcoin Purchases: about 6,720 bitcoins

Average Purchase Price: approximately $104,500

Strategic Impact: Bitcoin return since start of year exceeds 27%

Dimon Maintains $535 Target Price, Up 124%

(Source: Google)

Regarding MicroStrategy’s rating, TD Cowen assigns buy ratings to the newly issued STRE euro stock and STRC (floating-rate preferred stock), and reaffirms buy ratings for existing series STRF, STRK, and STRD preferred stocks. This comprehensive buy recommendation indicates strong confidence in MicroStrategy’s overall strategy.

As for MicroStrategy’s common stock (ticker: MSTR), TD Cowen maintains a target price of $535, which is 124% above yesterday’s close. On November 11, the stock closed at $231.35. If the stock reaches the target, investors could realize more than double their investment.

The $535 target is based on the potential value of MicroStrategy’s bitcoin holdings and its future accumulation plans. TD Cowen analysts project that by December 2027, MicroStrategy could hold approximately 815,000 bitcoins, up from the current 641,692. This implies an increase of about 173,000 bitcoins.

If this forecast materializes, and bitcoin’s year-end price reaches $141,277, the value of MicroStrategy’s bitcoin holdings in 2027 would be approximately $115 billion. Considering the company may continue to finance via preferred stocks and convertible bonds, total liabilities could reach $50–60 billion, leaving net assets around $55–65 billion. At this valuation, the $535 target price for MSTR is logically justified.

It’s important to note that Dimon Securities and its affiliates are market makers for MicroStrategy’s stock. This relationship could influence the objectivity of the analysis. Market makers typically hold inventory of the stock, and a rising stock price benefits them. Nonetheless, as a regulated investment bank, TD Cowen’s analysis should be based on reasonable models and assumptions, making its forecasts still valuable.

Despite MicroStrategy’s stock dropping over 27% in the past month, TD Cowen maintains a buy rating and high target price, reflecting confidence in its long-term outlook. This bullish stance amid recent declines may stem from deep fundamental insights or over-optimism. The market will test the accuracy of this judgment in the coming months.

Three Bitcoin Price Scenarios by Year-End: $60,000, $141,277, and $160,000

TD Cowen also reaffirms its year-end bitcoin price forecast, maintaining a base scenario where bitcoin ends the year at $141,277. In a bull scenario, bitcoin could reach $160,000, while in a bear scenario, it could drop to $60,000.

Analysts note that the base case assumes MicroStrategy will buy about $4 billion worth of bitcoin each quarter. If the purchase volume increases to over $4.5 billion, a bull scenario could be triggered; if market conditions or financing difficulties cause purchases to halt, a bear scenario may ensue. This framework highlights MicroStrategy’s pivotal role in bitcoin price discovery.

Bitcoin Year-End Price Scenarios

Bull Market: $160,000 (if quarterly purchases exceed $4.5 billion and institutional demand explodes)

Base Case: $141,277 (quarterly purchases of $4 billion, steady market growth)

Bear Market: $60,000 (if MicroStrategy suspends purchases, market demand collapses)

The $141,277 base scenario implies a 37% increase from current prices around $103,000. Achieving this within less than two months would require strong catalysts, such as the Fed confirming rate cuts in December, MicroStrategy’s continued large-scale accumulation, accelerated bitcoin ETF inflows, and seasonal rallying before year-end.

The $160,000 bull case depends on all positive factors aligning, including MicroStrategy’s purchase scale expanding beyond $4.5 billion per quarter, which would require successful larger-scale financing—via new preferred stock, convertible bonds, or equity issuance. If sustained buying occurs alongside full institutional demand, $160,000 is plausible.

The $60,000 bear scenario is the most pessimistic, representing a 42% decline from current levels. It could be triggered if MicroStrategy’s purchases halt due to market or financing issues, removing a key structural buyer and potentially causing a chain reaction. Additionally, a sharp bitcoin price decline could pressure MicroStrategy’s preferred stock dividends, possibly forcing asset sales and further declines.

MicroStrategy’s fate is deeply tied to bitcoin. Its financial strategies, stock performance, and market confidence are closely linked to bitcoin’s price trajectory. This highly concentrated approach has generated remarkable returns during bullish cycles but also exposes the company to significant vulnerability during downturns. TD Cowen’s three-scenario analysis provides investors with a clear framework of risks and opportunities.