MicroStrategy (MSTR) shares surged to $190 for the first time since late March, closing up 5.5%.
Markus Thielen, founder of 10x Research, noted in a report that a breakout above the $180 price level could bring more momentum to MicroStrategy, even though his analysis shows the stock is 44% overvalued relative to BTC. Hedge funds holding $4.6 billion in short positions could face pressure to cover their positions if the stock price rises above $180.
In addition, as demand for the company's bonds has been strong and issuance continues to increase, the rally could prompt MicroStrategy to raise more debt to buy Bitcoin. "It seems logical to buy Bitcoin by borrowing money," he wrote. "A breakout in MicroStrategy's stock price could have a 'put the cart before the horse' effect, with its stock price momentum having a positive impact on Bitcoin prices, forming a feedback loop." (CoinDesk)