Canaccord cut its price target for MicroStrategy ( MSTR ) to $1,590 from $1,810.The company bought more bitcoin in the first quarter and now owns a total of 214,400 BTC worth about $13.6 billion, the report said.MicroStrategy ( MSTR ) reported a first-quarter net operating loss of $53.1 million after taking a digital asset impairment charge of $191.6 million.MicroStrategy ( MSTR ) raised over $1.5 billion in the first quarter and used the proceeds to acquire an additional 25,250 bitcoin {{BTC}} and now owns 214,400 BTC worth around $13.6 billion, broker Canaccord Genuity ( CCORF ) said in a research report on Monday.

MicroStrategy’s corporate strategy is partly based on the acquisition and holding of bitcoin. The firm’s total holding is almost 1% of bitcoin’s total circulating supply of 19.7 million tokens.

The software company achieved double-digit subscription services revenue growth in the first quarter as it moved its business to the cloud, the report said. Still, it reported a net operating loss of $53.1 million after taking a digital asset impairment charge of $191.6 million, the company said in a press release Monday.

The company could have adopted the new digital asset fair value accounting standard and reported a large profit due to the rally in bitcoin in the first quarter, but it decided not to do so.

Canaccord cut its MicroStrategy ( MSTR ) price target to $1,590 from $1,810 while maintaining its buy rating. The stock slipped 2.5% to $1,261 in after-hours trading.

“The main drivers are of our new price target are continued appreciation of BTC and some revaluation up for the software business,” analysts led by Joseph Vafi wrote, adding that “given MSTR’s current premium to its BTC holdings, we are not assuming this to be an upside driver from current levels.”

“We note that the current 71% equity value premium to the HODL is still quite significant, and thus contraction here should be viewed as a risk factor,” the authors wrote.

There is a scarcity value to MicroStrategy’s bitcoin holdings, given it remains one of the best ways for most equity investors to gain exposure to the digital asset, Canaccord said, and this setup “provides the potential for an additional premium to spot to re-emerge in MSTR shares.”

The setup for bitcoin is also positive.“BTC is biased higher given recent approvals of U.S. BTC spot exchange-traded funds (ETFs) coming from heavyweight asset managers and the very strong adoption there combined with the recent BTC halving,” the report added.

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