Investment firms TD Cowen and Benchmark confirmed their 'buy' recommendation for Strategy's shares and endorsed the company's decision to hold more dollars in reserves. This is reported by The Block.
Experts called the dollar cushion a necessary condition for future bitcoin purchases, rather than a departure from the previous course. The day before, during an investor call on the results of the second quarter, Strategy's Executive Chairman Michael Saylor stated that the company's reserves would no longer consist of 100% cryptocurrency.
Despite the unanimous recommendation, the analysts' price targets differed:
- Benchmark lowered its target from $570 to $435, factoring in a bitcoin price of $100,000 by the end of 2026 instead of the previous $125,000;
- TD Cowen forecasted $260 per share;
- Mizuho Limited itself to stating that the company "can weather the storm" in case of a collapse in digital gold's price.
Main Priority
During the call, Strategy's management outlined that the central task would be to return the preferred shares (STRC) to the $99-100 range. Saylor explained that demand for these "short-term, low-volatility debt instruments" is 50-100 times greater than interest in any other company asset. Therefore, the company will focus its efforts on one product rather than developing new ones.
From March to July, institutional investments in STRC grew from $1.1 billion to $3.1 billion. Their share increased from 22% to 29%, and the average position doubled to $3.5 million.
An increase in STRC's price is necessary for these shares to once again become the primary instrument for raising funds to purchase bitcoin, the firm noted. Currently, the discount between the nominal and market value is about $1.2 billion. Following the last trading session, Strategy's share price fell by more than 4% to $93.28, and is down 38.6% since the beginning of the year.
Recall that on July 30, Strategy presented its financial report for the second quarter, according to which the net loss for April-June exceeded $8 billion. The company's CEO, Fong Le, stated that the company would continue to sell the first cryptocurrency as commercially feasible.
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