Key Highlights
- Strategy stock surged 5.1% to reach $135.17 following benign August inflation data that reduced concerns about aggressive rate increases
- STRC preferred shares climbed to a 15-week peak of $98.64, marking a 38% increase from its June 26 low and trading just $1.36 below par
- The company has bought back $811.5 million worth of STRC since July through proceeds from MSTR stock and Bitcoin sales
- Canaccord Genuity upgraded its MSTR target to $179 while maintaining a Buy recommendation
- Technical analysis shows MSTR approaching the 200-day simple moving average resistance at $138, with key support established at $126
Strategy (MSTR) shares advanced 5.1% during September 11 trading, touching an intraday peak of $137 before settling at $130. The rally followed the release of August consumer price index figures, which revealed a 0.33% monthly increase in core inflation, subsequently boosting Federal Reserve rate hike probabilities to 79% and triggering volatility across cryptocurrency-related equities.
Bitcoin hovered around the $77,000 level prior to the CPI announcement, facing headwinds from climbing oil prices and elevated government bond yields. The less alarming headline figure offered respite to risk-sensitive assets, propelling MSTR significantly higher than broader market benchmarks. The S&P 500 advanced 0.9%, while the Dow Jones Industrial Average rose 0.8%, and the Nasdaq Composite climbed 1.1%.
MSTR’s trading range over the past year spans from $81.81 to $365.21, leaving the stock substantially below its previous high.
STRC Preferred Shares Approach Par Value Milestone
A significant catalyst driving optimism surrounding MSTR involves the resurgence of its STRC preferred shares. STRC concluded September 11 trading at $98.64, representing its strongest performance since early June. This positions the security merely $1.36 beneath its $100 par value, following an impressive 38% surge from its historic low of $71 established on June 26.
Strategy has been aggressively repurchasing STRC, allocating $176 million in its latest buyback and $811.5 million overall since initiating the program in July. These acquisitions are being financed through the sale of MSTR shares and Bitcoin holdings.
A market analyst on X articulated the bullish thesis: should STRC return to par or exceed it, Strategy unlocks access to an expanded preferred equity financing mechanism. This capability would enable the company to secure additional capital for Bitcoin acquisitions, potentially elevating MSTR’s market-to-net asset value ratio.
Analyst Perspectives and Price Targets
The analyst calculated MSTR’s present mNAV at 1.11x and suggested that a move toward 1.5x mNAV, which he views as modest, would position the stock near $185 using existing NAV calculations. This projection excludes potential additional Bitcoin purchases that a fully operational STRC capital system could facilitate.
In a separate report, Canaccord Genuity elevated its MSTR price objective from $175 to $179, pointing to expectations for a Bitcoin price rebound. The firm reaffirmed its Buy recommendation.
Regarding balance sheet developments, Strategy disclosed on September 8 that it expanded its digital credit securities buyback authorization to $2 billion from $1 billion. The company also highlighted a $5.1 billion USD reserve alongside $1 billion available for MSTR stock repurchases.
Strategy’s paper gains on its Bitcoin portfolio have contracted to $1.3 billion amid the recent cryptocurrency price correction.
From a technical perspective, MSTR challenged resistance at its 200-day simple moving average of $138 on September 11 but couldn’t establish a close above that threshold. The Chaikin Money Flow indicator reading of 0.17 suggests accumulation continues to exceed distribution. Should buying momentum weaken, the 100-day simple moving average at $126 represents the subsequent support zone. A closing price beneath $130 would expose the August 21 low of $117.
Other cryptocurrency-linked equities posted moderate gains. Coinbase (COIN) increased 1.73% while Circle (CRCL) added 0.31% during the session.
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