TLDR
- Strategy stock fell 5.7% to $125.66 Wednesday, approaching its lowest closing price since September 9, 2024
- Canaccord Genuity slashed its price target 60% from $474 to $185 but retained a Buy rating on the shares
- Strategy owns 713,502 Bitcoins valued at roughly $53.6 billion with Bitcoin trading near $73,000
- The stock’s premium to net asset value dropped to 1.06x from levels that previously topped 2x
- Canaccord forecasts Bitcoin will gain 20% in 2026 and Strategy will trade at a 1.25x multiple
Strategy stock tumbled 5.7% to $125.66 Wednesday. The decline came as Canaccord Genuity dramatically reduced its price target on the Bitcoin-heavy company.
The firm cut its target from $474 to $185, representing a 60% decrease. Canaccord kept its Buy rating intact despite the steep reduction.
Strategy has lost 72% of its value since July. Wednesday’s trading put shares on track for their lowest close since September 9, 2024.
The company’s struggles mirror Bitcoin’s collapse. The cryptocurrency plunged to around $73,000 after reaching record highs above $126,000 in October.
Strategy owns 713,502 Bitcoins worth about $53.6 billion. The company paid an average of $76,052 per coin for its holdings.
Valuation Premium Collapses
Strategy’s market-to-net-asset-value ratio has shrunk to 1.06. Investors once paid premiums exceeding 2x the value of the company’s Bitcoin stash.
Bitcoin recently fell below Strategy’s average purchase price. This raised questions about whether the company can handle its debt load and dividend requirements.
Canaccord analyst Joseph Vani pushed back on those fears. Strategy holds $8 billion in convertible debt compared to $53.6 billion in Bitcoin.
The analyst said preferred stock dividends can be covered through small share sales. Vani called Strategy’s structure well-designed for crypto market downturns.
“MSTR shares remain a bit of a lightning rod for media attention when BTC is weak,” Vani wrote. He believes the business model can handle extended weakness.
Crypto Recovery on Horizon
Vani thinks Bitcoin has been wrongly categorized as a risk asset. He argues the cryptocurrency should be valued as a store of wealth.
The analyst cited Bitcoin’s scarcity and verifiability as key strengths. These characteristics support its role as a long-term value store.
Canaccord expects Bitcoin prices to climb roughly 20% during 2026. The firm admitted pinpointing the exact timing remains challenging.
Strategy won’t return to its massive premium levels soon. Canaccord projects the stock will trade at a 1.25x multiple to its Bitcoin holdings.
The company releases fourth-quarter results Thursday. Strategy will probably report an unrealized loss because Bitcoin dropped during the quarter.
Vani stressed that Bitcoin’s direction matters more than quarterly numbers. Strategy’s stock price moves in lockstep with cryptocurrency trends.
Strategy developed the corporate Bitcoin treasury playbook. The company sells equity and debt to fund Bitcoin purchases.
Bitcoin touched its lowest level in over a year Tuesday. The digital asset’s weakness has weighed heavily on Strategy throughout the selloff.
Canaccord thinks Bitcoin’s decline may be finishing. The firm views current cryptocurrency prices as attractive entry points.
Strategy’s debt obligations remain manageable given its Bitcoin position. The company’s holdings provide ample coverage for its financial commitments.
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