Shares of Strategy (MSTR) fell about 3.6% today, dragged down by Bitcoin’s decline.
The broader cryptocurrency market is under pressure. Bitcoin is down nearly 2% over the past 24 hours, pulling back from its recent highs. This decline extends to stocks related to cryptocurrencies, and the strategy is considered one of the stocks most at risk.
The strategy (MSTR) is currently trading at $319.84
Strategy, co-founded by Michael Saylor, reported a $3.9 billion gain in fair value for the third quarter of this year. The company owns approximately 640,000 bitcoins, with an average purchase price of $73,983 per coin.
Investors now see the strategy as a pure Bitcoin play. Its multiple for its Bitcoin holdings has fallen relative to the value of its BTC. This means that when Bitcoin declines, the strategy feels difficult.
Recently, in Wide-ranging conversation With Bitcoin Magazine, Saylor charts an “endgame” in which his company builds a trillion-dollar bitcoin balance sheet — and then uses that capital base to help reinvent the universal credit system.
As with the strategy, institutional adoption of digital assets is expected to rise, with State Street research showing that average portfolio exposure is expected to rise from 7% to 16% within three years.
Nearly 60% of executives surveyed by State Street plan to boost digital asset allocation, reflecting a shift toward a strategic shift in the cryptocurrency space — just like the strategy.
Analysts are optimistic about the strategy
But analysts remain optimistic. Standard Mark Palmer I stay Buy rating and target at $705, arguing that the recent squeeze is more about the contract premium and overall volatility than a flawed strategy.
The $705 price target is more than double the stock’s current price.
The company’s bitcoin-linked perpetual preferred stock provides perpetual, non-dilutive capital and eliminates refinancing risks associated with bitcoin’s volatility, Ballmer said. Despite some declines in the stock, Benchmark highlighted Strategy’s 640,031 BTC treasury and structural advantages as key long-term strengths.
But the market mood is fragile. With Bitcoin under pressure, the strategy’s stock is following closely — down nearly 3.6% on the day.
The post Why Is Michael Saylor’s Strategy (MSTR) Down Today? first appeared on Investorempires.com.
