TLDR
- Strategy sold 4.5 million common shares last week, raising $748 million in net proceeds.
- The company’s cash reserves now stand at $2.19 billion, sufficient to cover 32 months of obligations.
- Bitcoin buying is on hold as the firm rebalances assets amid a crypto market decline.
- Strategy possesses 671,268 Bitcoin, valued at over $59 billion at current prices.
- TD Cowen reaffirms its buy rating and $500 price target, even with the stock trading near $165.
Between December 15 and 21, Strategy sold 4.5 million shares of its Class A common stock. This sale, conducted via the company’s at-the-market offering program, yielded $747.8 million in net proceeds.
This capital increase boosted Strategy’s U.S. dollar reserves to $2.19 billion. Executive chairman Michael Saylor shared the updated numbers in a post this week.
Strategy has increased its USD Reserve by $748 million and now holds $2.19 billion and ₿671,268.
— Michael Saylor (@saylor)
The company made no Bitcoin purchases during this time. Its most recent acquisition was on December 15, when it purchased 10,645 BTC for $980.3 million, averaging $92,098 per Bitcoin.
Strategy’s current holdings amount to 671,268 Bitcoin, with a market value exceeding $59 billion. The aggregate cost to acquire this Bitcoin was $50.33 billion, resulting in an average purchase price of $74,972 per coin.
The firm created its U.S. dollar reserve in early December, starting with $1.44 billion. This reserve is designated for dividend payments on preferred stock and interest on outstanding debt.
Strategy has stated its intention to keep reserves adequate to cover a minimum of 12 months of obligations, with a long-term goal of extending that coverage to 24 months or longer.
Cash Position Strengthens Balance Sheet
Analysts at TD Securities, led by Lance Vitanza, stated that the larger cash reserve enhances Strategy’s capacity to navigate difficult market environments. The reserve now provides for approximately 32 months of interest and dividend payments.
“The move underscores the company’s balance sheet strength and should alleviate concerns about its ongoing viability, even in a prolonged ‘crypto winter’ scenario,” the analysts wrote in a Monday report.
Over the last four weeks, the company sold more than 22 million shares. TD Securities reported that these sales aligned with average daily trading volume and did not negatively impact market liquidity.
At the time of writing, Strategy shares were trading around $165. The stock has declined more than 43% since the start of the year.
TD Cowen Maintains Bullish Outlook
TD Securities reaffirmed its buy rating for Strategy, maintaining a $500 price target. This target suggests a potential gain of almost 200% from present levels.
The analysts project that Strategy could hold about 835,000 Bitcoin by the conclusion of fiscal year 2027. They estimate the stock’s intrinsic value at roughly $380 per share in one year and $515 in two years.
TD Cowen analysts observed that worries regarding Strategy’s balance sheet health seem exaggerated. The company’s recent steps to bolster liquidity show financial resilience in a stressed market.
Bitcoin was trading near $89,433, reflecting a 4.4% drop over the previous 12 months. Strategy’s common stock has decreased by nearly 50% in the past year.
