Breaking News: TD Cowen has raised its price target for Strategy (MSTR) to $400, citing a surge in Bitcoin accumulation and a strategic shift in its capital structure. The new target represents a more than 140% upside from the current trading price of around $166.
“We see MSTR as a leveraged play on Bitcoin with improving fundamentals,” said a TD Cowen analyst in a note to clients. The firm maintained a Buy rating, highlighting that the company’s Bitcoin purchases have outpaced expectations and its financing strategy is now less dilutive for shareholders.
Key Developments
Strategy, led by executive chairman Michael Saylor, now holds 843,738 BTC, valued near $64 billion—over 4% of all Bitcoin ever mined. In a single week from May 11 to May 17, the firm acquired 24,869 BTC for about $2.01 billion, accelerating its buying pace.
TD Cowen projects the company will purchase close to 100,000 BTC in the second quarter of 2025 alone, a figure that far exceeds prior forecasts. This aggressive accumulation has boosted a key metric: Bitcoin per 1,000 fully diluted shares rose to 2.21, up from 1.95 at the end of 2024.
Background: Balance Sheet Transformation
Strategy’s recent shift toward preferred equity financing has been instrumental. In Q2 2025, the firm raised approximately $1.95 billion through preferred shares, with most proceeds directed to Bitcoin purchases. “Preferred equity is less dilutive than common stock issuance and more favorable for existing shareholders,” the analyst noted.
Additionally, Strategy repurchased about $1.5 billion in convertible notes at a discount, reducing future refinancing risk and limiting potential dilution. TD Cowen called this move a “positive signal for both equity holders and creditors.”
Valuation Framework
The brokerage applies a multiple to projected Bitcoin gains, incorporating expected holdings, debt, and preferred equity obligations. It projects Bitcoin-related gains exceeding $15 billion in 2026, supporting the raised price target.
What This Means for Investors
Despite the bullish outlook, MSTR remains highly volatile and tightly tied to Bitcoin price swings. The stock has fallen about 60% over the past year and sits well below its 52-week high above $450. Recent declines in Bitcoin have also weighed on shares, reinforcing its role as a leveraged proxy for the cryptocurrency.
- Short-term risk: Bitcoin price drops could trigger further sell-offs in MSTR.
- Long-term potential: If Bitcoin continues its upward trajectory, Strategy’s per-share holdings could drive significant gains.
- Financing innovation: The use of preferred equity and debt buybacks may set a precedent for other corporate Bitcoin treasuries.
“The balance sheet overhaul reduces the risk of catastrophic dilution and aligns the company for sustained growth,” the analyst added. However, investors should monitor Bitcoin’s price closely, as MSTR’s fate is deeply intertwined with the digital asset.
Note: This article is for informational purposes only and does not constitute investment advice.