Cantor Fitzgerald analyst Brett Knoblauch lowered his 12-month price target for Strategy (MSTR) to $229 from $560, citing the challenges of raising capital amid weaker bitcoin-linked market conditions. The downgrade reflects the firm’s declining adjusted net asset value multiple, which now limits Strategy’s ability to issue equity at a premium—a key component of its long-term plan to acquire more bitcoin.
Despite the revision, Knoblauch retains an overweight rating, noting that the new target still implies nearly 30% upside from Strategy’s current price of $180.
Strategy’s business model has long relied on raising funds through common stock, preferred stock, and convertible debt offerings, then deploying the proceeds to purchase bitcoin. This approach fueled exceptional returns following the company’s first bitcoin acquisition in 2020. Over the past year, however, softer investor appetite for a premium on Strategy’s bitcoin holdings, combined with subdued bitcoin prices, has pushed MSTR down roughly 70% from its late-2024 peak.
Cantor now estimates Strategy’s fully adjusted market net asset value (mNAV) at 1.18x, still a premium but significantly lower than historical levels. This compression constrains the company from executing potentially dilutive equity raises. Consequently, Knoblauch slashed his forecast for annual capital market proceeds to $7.8 billion, down from $22.5 billion, and cut the value attributed to Strategy’s treasury operations—from $364 per share to $74.
Still, Knoblauch emphasized that the outlook is not entirely bleak. “This is a function of both falling bitcoin prices and lower multiples,” he wrote, signaling confidence that Strategy’s approach could regain momentum if bitcoin recovers and investors return to leveraged exposure.
Mizuho analysts Dan Dolev and Alexander Jenkins shared a cautiously optimistic perspective, highlighting Strategy’s strengthened liquidity following a $1.44 billion equity raise. The firm now maintains a cash reserve sufficient to cover 21 months of preferred stock dividends, allowing it to hold its bitcoin positions without immediate sales pressure.
At a recent Mizuho-hosted event, CFO Andrew Kang outlined a conservative approach to future fundraising. He indicated that Strategy will not refinance convertible debt until its first maturity in 2028 and will primarily rely on preferred equity to access capital while preserving its bitcoin holdings. The company plans to resume issuing new equity only when its mNAV exceeds 1, signaling market willingness to pay a premium for its bitcoin exposure. Otherwise, bitcoin sales would remain a last-resort measure.
Strategy appears to be echoing its 2022 playbook, pausing purchases during market downturns and resuming once conditions improve. Analysts suggest that this patient, liquidity-focused strategy could help the firm weather the current slump while positioning it for future upside.
