Wall Street ' s valuation of Strategy continued to contract, but support for its Bitcoin Treasury model did not significantly shift. Corporate disclosures show that they have recently updated their capital management arrangements and, while retaining the Bitcoin core strategy, have also left more room for liquidity and debt management.
Canaccord down the target price.
Canaccord lowers Strategy's target price to $130, but indicates that bitcoin's long-term investment logic remains unchanged. According to the Agency, bitcoin continues to benefit from limited supply and expanded use, and its position in financial markets is stronger than in the past.
At the same time, Canaccord noted that recent market performance had not met earlier expectations and therefore adjusted the valuation judgement for Strategy. Nevertheless, the Agency considers that as long as Bitcoin maintains a moderate annual increase, Strategy ' s company model, with Bitcoin at its core, remains sustainable.
Corporate disclosure of capital arrangements
The company disclosed that Strategy, in a regulatory document submitted on 29 June, stated that its “digital credit capital framework” allowed the company to raise funds by selling bitcoin, if necessary, up to US$ 12.5 billion.
According to the disclosure, these funds could be used to maintain the United States dollar reserve, to pay priority dividends, to meet interest obligations, to replenish cash balances and to finance future stock buy-backs.
Repurchase authorization and currency paused.
The same document also shows that the company was authorized to repurchase up to $1 billion in digital credit securities, covering STRC, STRF, STRD and STRK. Management may initiate operations when repurchases are considered to be helpful in improving the capital structure.
Strategy also disclosed that the company had suspended further purchases of bitcoin. At the same time, as part of the capital management plan, the company has sold approximately $1.15 billion in MSTR shares.
Apart from Canaccord, Wall Street agencies are still generally supportive. TD Cowen argued that the new capital framework would help to increase financial flexibility; Cantor Fitzgerald maintained a target price of $212 and Benchmark maintained a target price of $570.
Additional information:Benchmark mentioned that, despite the weakness of Strategy ' s priority share in recent months, the company continued to include Bitcoin in the balance sheet.