Strategy Stock Gains Momentum as Major Bitcoin Purchase Meets Analyst Approval

A significant Bitcoin acquisition and renewed Wall Street confidence have combined to reinvigorate interest in the shares of Strategy, the world’s largest corporate Bitcoin treasury. This comes after a prolonged period of declining valuation for the stock.

Wall Street Weighs In with Bullish Outlook

Analyst sentiment provided a fresh boost to the investment case. On March 10, B. Riley Securities initiated coverage with a Buy rating, setting a $175 price target. Analyst Fedor Shabalin highlighted the stock’s current trading level at 1.2 times its mNAV (market capitalization to net asset value), a notable discount from its peak multiple of 3.4x in 2024, presenting what he views as an attractive entry point.

In a separate move, BTIG analyst Andrew Harte reaffirmed his Buy recommendation, maintaining a $250 price target. Meanwhile, Mizuho Securities held its Outperform rating but adjusted its target downward from $403 to $320, citing the recent softer Bitcoin price environment.

Details of the Record Bitcoin Accumulation

Between March 2 and March 8, the company executed its largest single Bitcoin purchase of the year, acquiring 17,994 BTC for approximately $1.28 billion. This marked the biggest weekly addition to its treasury in seven weeks.

The purchase was funded through a dual-track equity offering. Roughly $900 million was raised via the sale of Class A common stock. An additional $377 million came from the placement of “Stretch” preferred shares (STRC), which were issued at a discount to their face value. This STRC instrument is a cornerstone of Strategy’s funding model, carrying an annual dividend yield of 11.5%—its seventh increase since inception. Proceeds are channeled directly into further Bitcoin acquisitions, a strategy that remains viable as long as Bitcoin’s appreciation outpaces the cost of the dividend obligations.

Should investors sell immediately? Or is it worth buying Strategy?

Current Holdings and Market Context

With this latest purchase, Strategy’s total Bitcoin holdings now stand at 738,731 BTC, representing about 3.5% of the entire Bitcoin supply. The company’s average cost basis is approximately $75,862 per coin, with a total investment nearing $56 billion. It maintains a liquid cash buffer of around $2.25 billion.

Despite the recent strategic buying, the stock’s performance has significantly lagged the underlying asset. Over the past twelve months, Strategy shares have lost about 51% of their value, underperforming Bitcoin itself, which is down roughly 45% from its October peak. However, a recovery is underway from its 52-week low of €90.74 hit in early February, with the price rebounding by over 31%.

Market skepticism persists, as evidenced by rising short interest. This metric has climbed from an annual low of 5% to a recent 12%, indicating a segment of investors remains bearish on the stock’s prospects.

Path Forward Tied to Bitcoin

The future trajectory of Strategy’s stock remains inextricably linked to Bitcoin’s price movement. Following the recent institutional buying pressure, Bitcoin is once again approaching the $70,000 threshold. Whether this momentum can sustainably restore investor confidence will become clearer with upcoming quarterly results and the subsequent movement in the company’s mNAV ratio.