Strategy Inc. MSTR shares (previously known as Microstrategy) fell more than 8% on Tuesday as a decline in Bitcoin prices weighed on cryptocurrency-linked stocks and prompted TD Cowen to lower its price target for the company, while maintaining a positive long-term outlook.
The stock came under pressure alongside the broader crypto sector as Bitcoin fell below $60,000.
TD Cowen analyst Lance Vitanza reduced his price target on Strategy to $260 from $400, while reiterating a Buy rating.
The analyst said the lower target reflected Bitcoin’s current price rather than a change in conviction about the company.
The decline also comes as Strategy continues to adjust its capital strategy after years of aggressively acquiring Bitcoin through equity, debt, and preferred stock offerings.
Strategy built its reputation by raising capital and using the proceeds to purchase Bitcoin, benefiting when its shares traded at a premium to the value of its cryptocurrency holdings.
Initially, the company relied on its own balance sheet after adopting Bitcoin as its primary treasury reserve asset in late 2020.
It later expanded its financing strategy through convertible debt offerings and at-the-market equity sales, allowing it to continue accumulating Bitcoin.
A significant shift came in January 2025 with the introduction of preferred stock offerings, including its Stretch preferred shares, trading under the ticker STRC.
The preferred securities became a key funding source for additional Bitcoin purchases.
However, STRC has traded well below its $100 par value, falling below $74 last week, reducing the company’s ability to efficiently raise fresh capital.
In response, Strategy unveiled a new financial framework on Tuesday.
The company has authorized up to $1.25 billion in Bitcoin sales to strengthen its $2.55 billion U.S. dollar reserve, which is dedicated to meeting annual dividend and interest obligations.
The move represents a notable evolution from the company’s longstanding strategy of accumulating Bitcoin without selling.
Strategy Chairman Michael Saylor has long promoted a buy-and-hold philosophy for Bitcoin. However, management has recently signaled a more flexible approach.
Chief Executive Officer Phong Le said last month, “We are not going to sit back and just say we will never sell the Bitcoin.”
On Monday, Le added that the company was “evolving from one-way capital issuance to active capital management.”
The company executed its first strategic Bitcoin sale at the end of May, excluding a tax-related transaction completed in 2022.
As of Tuesday, Strategy’s market multiple of net asset value, or mNAV, stood at approximately 1.04, indicating the shares continue to trade at a premium to the value of the company’s Bitcoin holdings, although that premium has narrowed considerably.
Strategy also paused its regular Bitcoin purchases during the six days ended June 28.
As of Monday, the company held 847,363 Bitcoin acquired for approximately $64.1 billion, representing an average purchase price of $75,651 per coin.
TD Cowen continues to expect both Strategy and Bitcoin to recover by year-end, although at lower levels than previously forecast.
The firm now expects Bitcoin to reach approximately $100,000 by the end of 2026, down from its previous forecast of $140,000. It also lowered Strategy’s price target to $260 from $400, while maintaining its Buy rating.
Vitanza said the updated framework was consistent with his earlier expectations, noting he had anticipated Strategy would selectively sell Bitcoin to support dividend payments “where appropriate.”
Meanwhile, Citi Research analyst Peter Christiansen described the company’s revised strategy as “buying more time.”
He said the financial overhaul, which also includes a $1 billion common stock buyback program and an increase in STRC’s annual dividend to 12% from 11.5%, gives Strategy additional flexibility while Bitcoin prices remain under pressure.
Christiansen added that the larger US dollar reserve and the possibility of future Bitcoin sales could weigh on Strategy’s Bitcoin yield and mNAV potential in the near term, even as the changes reduce pressure on the company’s preferred stock funding model and credit profile.