Benchmark doubles down on $570 target for Strategy's MSTR as Saylor unveils capital overhaul
The verdict has started to come in response to Strategy’s June 29 announcement of its five-part capital management framework, with Benchmark Equity Research doubling down on its Buy rating of the MSTR stock, along with a $570 price projection.
As of writing, the MSTR stock was trading at $92.68, up nearly 13% from $82.31 when markets closed on June 29. The price target implies that Benchmark sees the common stock of the leading Bitcoin treasury firm stringing together a 500%+ run.
The rally also extended to the STRC preferred stock, as it also followed MSTR in staging an over 12% rally since markets closed yesterday.
Saylor was also in a bullish mood early this morning, posting on X, “Stronger credit. Stronger equity. More Bitcoin,” as Strategy stocks returned into the green.
Are analysts bullish on Strategy now?
The impetus for the bullish call came after Strategy disclosed its “Digital Credit Capital Framework” in an SEC filing. As reported by Cryptopolitan, that package included a hike in STRC dividend payments to 12%, a discretionary $2 billion stock buyback program and board-level approval to sell up to $1.25 billion in Bitcoins from its 847,363 BTC treasury.
However, not everyone is riding the bull with Benchmark and Saylor.
Writing in response to the Bitcoin sale program that Strategy formalized in its SEC filing, CryptoQuant’s head of research Julio Moreno warned that selling Bitcoin or common stock to defend STRC could be no different than opening the proverbial Pandora’s Box.
Moreno predicted that any price level that Strategy picks to start to intervene will by default become the line that traders pick as the firm’s breaking point.
“The moment the market knows the price level Strategy is trying to defend, it becomes a target,” Moreno said. He continued by implying that Strategy could become overwhelmed by selling pressure at that level.
Moreno was the same CryptoQuant analyst who had recommended for Strategy to hit the brakes on buying Bitcoin and focus on rebuilding its cash reserves in earlier Cryptopolitan reports.
CryptoQuant’s warning came as Strategy faced roughly $2.8 billion in dividend bills over the next two years. The firm’s breathing space was also quickly disappearing, with coverage compressing from more than seven years to about 14 months during a six-month period when annual preferred dividend costs grew from $300 million to $1.2 billion.
Strategy is no longer bound to its own BTC purchases
Benchmark analyst Mark Palmer characterized Strategy’s capital framework as formal permission to put its capital machine into “reverse” during periods of market stress. So, instead of charging ahead into Bitcoin purchases no matter what, the firm can now repurchase common and preferred shares, turn its Bitcoin into cash to meet obligations, and take a break from issuing new common stock when shares slide below a sensible net asset value level.
“Strategy is now an active manager of both sides of its capital structure, an approach that we view as a significant positive for its shareholders,” Palmer wrote in a client note.
Palmer argued that the $1.25 billion Bitcoin sale authorization amounts to a “rounding error” against the company’s 847,363 BTC balance. Strategy previously sold just 32 Bitcoin in May, a transaction worth roughly $2.5 million that funded a preferred dividend payment. That sale broke executive chairman Michael Saylor’s long-standing pledge never to sell, Cryptopolitan reported.
How are markets reacting to the new-look Strategy?
Monday’s market reaction was swift. MSTR climbed 12.6% to $92.68, while STRC jumped roughly 10% to around $83.67, recovering a chunk of June’s losses, Google Finance data showed.
CEO Phong Le framed the shift as a transition from pure capital issuance to active capital structure management through both issuance and repurchases, Cryptopolitan reported.
Whether the framework delivers depends on Bitcoin recovering toward Strategy’s cost basis and whether the company exercises its new tools, or keeps them holstered as options that reassure the market without being used.
Investors will watch quarterly disclosures on Bitcoin sales, reserve balances, and repurchase activity in upcoming filings for signals on which direction Strategy steers from here.
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