TLDR
- Canaccord Genuity cut Strategy’s price target by 60% to $185, though it retained the stock’s Buy rating
- Strategy shares dropped 5.7% to $125.66 on Wednesday, approaching their lowest closing price since September 2024
- The firm holds 713,502 Bitcoins valued at roughly $53.6 billion, as Bitcoin has fallen to about $73,000 from its October peak of $126,000
- Strategy’s market-to-net-asset-value ratio has shrunk to 1.06, down from earlier premiums that topped 2x
- Canaccord forecasts Bitcoin will rebound by roughly 20% in 2026, and Strategy shares will hit a 1.25x premium relative to its underlying Bitcoin holdings
Strategy shares extended their downward trend on Wednesday, falling 5.7% to $125.66. This drop followed Canaccord Genuity’s 60% cut to its price target for the Bitcoin-focused firm.
The firm lowered its target from $474 to $185. Even with this sharp reduction, Canaccord kept Strategy’s Buy rating intact.
The price target change mirrors Bitcoin’s sharp drop from its October high. The crypto reached all-time highs above $126,000 before tumbling to approximately $73,000.
Strategy shares have tracked Bitcoin’s slump. The stock has dropped 72% since July, per Dow Jones Market Data. Wednesday’s decline set it on course for its lowest close since September 9, 2024.
Bitcoin Holdings Under Pressure
Strategy holds 713,502 Bitcoins worth roughly $53.6 billion. The firm’s average cost per coin is $76,052.
Bitcoin recently fell below this average purchase price. This has sparked worries about Strategy’s capacity to fulfill its debt and dividend commitments.
Strategy’s premium over its Bitcoin holdings has vanished. The firm’s market-to-net-asset-value ratio now stands at 1.06. Previously, investors paid multiples of more than 2x the Bitcoin value on Strategy’s balance sheet.
Canaccord analyst Joseph Vani directly addressed the debt worries. Strategy has $8 billion in convertible debt compared to its $53.6 billion Bitcoin holdings. The firm thinks this difference offers sufficient protection.
Dividend Payments Remain Serviceable
Vani contended that preferred stock dividend payments can be covered via small share sales. He noted Strategy’s business model is designed to weather a severe crypto winter.
“MSTR shares remain a bit of a lightning rod for media attention when BTC is weak,” Vani wrote.
He noted the firm’s underlying business structure was intentionally built to handle downturns.
The analyst thinks Bitcoin has been incorrectly categorized as a risk asset. Vani contends the crypto should instead be traded as a store of value.
“Bitcoin remains a compelling store of value, checking all key boxes,” he wrote.
Vani cited scarcity and verifiability as core characteristics.
Canaccord forecasts Bitcoin prices will rebound by about 20% in 2026. The firm admitted it’s hard to predict when the recovery will happen.
The analyst doesn’t anticipate Strategy’s premium will return to earlier heights. Canaccord predicts the stock will hit a 1.25x multiple compared to its underlying Bitcoin holdings.
Strategy will release its fourth-quarter earnings on Thursday. Canaccord forecasts the firm will report an unrealized loss because of Bitcoin’s quarterly drop.
Vani pointed out that Bitcoin’s outlook is more important than Strategy’s quarterly report. The stock’s performance continues to be linked to crypto price fluctuations.
Strategy currently trades near levels last seen in September 2024. The firm was a pioneer in the digital-asset treasury model, having issued equity and debt to acquire Bitcoin.
