With the introduction of the new Bitcoin capital framework by Strategy, Wall Street agencies divided their judgement of the company. Benchmark maintained its target price of $570, considering that the new arrangement had enhanced the company ' s ability to handle buy-backs, preferential equity obligations and bitcoin assets during the period of capital pressure; however, the other two agencies, though still large, had synchronized the downwards of the target price.

Benchmark maintains the target price of $570.

According to Benchmark analyst Mark Palmer, this new framework allows Strategy to manage both the asset and liability sides. Companies can issue securities when market conditions are better and buy them back when repurchases are more cost-effective in order to increase the flexibility of the capital structure.

  • 25.5 billion United States dollars reserve, corresponding to approximately 17.4 monthly dividends coverage
  • $1 billion common stock buy-back plan
  • One billion-dollar priority stock buy-back plan covering STRC, STRF, STRD and STRK

The Board also authorized companies to sell up to $1.25 billion in bitcoin. Strategy currently holds 847,363 BTCs. According to Benchmark, external concerns about the large-scale sale of bitcoin by the company could be amplified, as the authorized sales remained limited relative to their total holdings.

Multi-agency lower target price

Apart from Benchmark, others are more cautious. TD Cowen maintains the “buy-in” rating, but lowers the Strategy target price from $400 to $260. According to the agency, the downward adjustment mainly reflects the expected weakening of the Bitcoin price rather than a negative shift to the new capital framework itself.

Canaccord General also maintains a “buy-in” rating but reduces the target price for 12 months from $163 to $130. Reasons included bitcoin fluctuations, capital structure risks, and investor concerns about the Strategy financing model.

The new arrangement was introduced when the stock price was under pressure

Before this framework was launched, MSTR fell by about 30 percent in a week. At one point, the company market value broke its Bitcoin hold, further weakening market sentiment. Priority equity structures have also become the focus of investor attention, in which STRC has a higher-than-normal repayment-rate position in the capital structure and is positioned as a less volatile open tool than MSTR.

However, the need for priority dividends payments also raised concerns. In particular, after STRC fell in nominal value, the market was more concerned about the ability of Strategy to support such securities without relying solely on increased ordinary equity.

Strategy's performance is still highly correlated with bitcoin prices. The report mentions that Bitcoin has recently reported an offer of $58,487, a cumulative decline of about 20 per cent in June and could be recorded as weak for the third consecutive quarter. MSTR fell to $84, a single-day decline of 8.9 per cent and a cumulative decline of about 41 per cent during the month, the worst monthly performance since 2022.

Overall, Benchmark’s optimistic judgment is based on the premise that Strategy can use the new framework to stabilize investors’ confidence, control the stress and keep the bitcoin openings as much as possible. Others were of the view that the direction of the company remained the same, but that the valuation space needed to be rebuilt under the weakening of Bitcoin and the pressure of the capital structure.