The target price of that crypto hoarding company was cut in half, but analysts say it can still rise by 30%?

Question

[Crypto World] An analyst from a leading brokerage firm slashed the target price of that company that’s been aggressively hoarding coins from $560 to $229. The reason is straightforward: whenever crypto prices fluctuate, their financing strategies hit a snag. However, the rating remains “Outperform,” since there’s still nearly 30% upside from the current price of $180.

Interestingly, the company’s price-to-book premium has dropped to just 1.18x. In plain terms, the stock price is too close to book value, so raising money by issuing new shares doesn’t work as well. Another institution did the math: the $1.44 billion they recently raised can last them 21 months, so they won’t need to sell coins for cash in the short term.

Their CFO also commented—going forward, they’ll focus on issuing preferred shares. Common stock? They’ll only consider it if the price-to-book premium goes back above 1x. Essentially, they’re betting on buying time: waiting for crypto prices to rebound before restarting the equity financing flywheel. But the problem now is, with the financing engine stalled, how long can their cash reserves really last?

GateUser-afe07a92 · Accepted Answer

Cut and increase holdings at the same time—this analyst really knows how to play the game. Betting on a 30% increase feels risky.

The financing engine has stalled; with 1.44 billion left, it’s hard to say how long it’ll last.

A price-to-book ratio of 1.18x, and still hoping to raise money by issuing more stock? Keep dreaming.

Can this preferred stock play really put out the fire? Looks more like drinking poison to quench thirst.

Waiting for the token price to rebound? That could take forever. What happens when the cash burns out?

This company sure has the guts to hoard tokens, but they’re out of tricks when it comes to raising funds.

BetterLuckyThanSmart · Answer

Cut from 560 to 229, the analysts sure made a ruthless move. Talking about increasing positions, but I think they're just betting on the price bouncing back.

The price is almost equal to the book value now, and no one's interested in new stock issuance. So just wait, anyway they have enough cash to last 21 months.

"Funding engine stalled" is a great way to put it. Now it's all about when the crypto market can come back to life.

The target price keeps getting revised, which shows no one has real confidence. If there was any certainty at all, analysts wouldn't be flip-flopping like this.

CryptoMom · Answer

Wait, slashed from 560 to 229? That’s so embarrassing. Are analysts getting scolded for this?

Cutting it this much but still calling for an increase—who’s actually buying that?

1.44 billion can last 21 months? Stop exaggerating, in crypto things can change completely in a month.

A P/B ratio of 1.18x and they’re already issuing preferred stock—let’s be real, it just means they can’t raise money anymore.

This is the same playbook as some projects from a couple years ago—wait and wait, and in the end all you get is liquidation.

Ser_Liquidated · Answer

Cut from 560 to 229 and still hyping up buying more? This analyst must have been woken up by the price drop.

MoonlightGamer · Answer

Cutting from 560 to 229, that’s a massive slash... But maintaining a "buy" rating still feels like some desperately optimistic take.

Relying on cash to last 21 months, to put it bluntly, is just betting on a crypto price rebound. If it doesn’t happen, they’re in real trouble.

Turning to preferred shares is truly a last resort—can’t raise funds with common shares, so they have to find another way.

The fundraising engine is stalling and they still dare to project a 30% increase—analysts must have some wild imagination.

This company is basically trading time for space now, classic gambler mentality.

Price-to-book ratio at 1.18—share price is hugging book value, no wonder financing is such a headache.

The good days for crypto hoarding companies might really be over; from here on, it all depends on crypto prices.

ProposalManiac · Answer

Target price slashed in half but still increasing holdings? There’s something interesting about this logic.

As soon as the fundraising engine stalls, they start playing the preferred stock game. To put it plainly, the common equity route is blocked. Wait, isn’t this just like what MicroStrategy did? Back then, the flywheel was powered by crypto prices—and now...

The price-to-book ratio is 1.18x, so there’s no more premium left. From a governance standpoint, the company is now using its cash reserves to bet on a crypto price rebound, and for the next 21 months, their fate depends on Bitcoin’s performance—this kind of incentive mechanism has inherent flaws; it’s basically an all-in on a single variable.

Saying there’s still 30% upside to justify the increased holdings—looks like the analyst is leaving themselves a way out.