Wall Street analysts are expressing strong support for Strategy’s (MSTR) ambitious bitcoin (BTC) acquisition strategy following the company’s announcement to double its capital-raising goals. The firm’s proactive plans have generated a flurry of positive commentary from market analysts, signaling confidence in MSTR’s approach.
“While the number of companies that have sought to replicate Strategy’s bitcoin acquisition strategy has continued to grow rapidly, MSTR issued a reminder of the extent of its first-mover advantage,” wrote Mark Palmer from Benchmark, reaffirming his buy rating and a price target of $650. Palmer highlighted the firm’s enhanced ability to accelerate its accumulation of bitcoin as it scales its operations.
Despite MSTR trading at more than double the value of its bitcoin holdings, Palmer identifies this valuation as “attractive,” crediting Executive Chairman Michael Saylor and his team for their ability to generate shareholder value through effective treasury operations.
In conjunction with its first quarter earnings report last Thursday, Strategy announced an ambitious expansion of its 21/21 plan, now aiming to raise a total of $84 billion through common stock and debt issuances, a significant increase from its initial target of $42 billion.
Lance Vitanza at TD Cowen recognized the boldness of this updated strategy, labeling it “aggressive but by no means out of the question.” He referenced the original 21/21 Plan, noting that Strategy has already successfully raised $28.3 billion. With a current market capitalization of $111 billion and substantial trading liquidity, Vitanza believes that the new fundraising target of $56.7 billion over the next 32 months is realistic, reaffirming his buy rating with a price target of $550.
Both analysts commended Strategy’s upgraded bitcoin-related performance targets, which now include a raised 2025 BTC Yield target of 25% (up from 15%) and an increase in BTC $ Gain expectations to $15 billion (from $10 billion). Remarkably, Palmer noted that the company has already achieved approximately 90% of its original BTC Yield goal in just four months.
As of early Friday, MSTR shares rose by 1.8% to $388, while bitcoin prices continue to hover just below the $97,000 mark.
Earnings Call Highlights
During the post-earnings conference call, Saylor emphasized the significance of Bitcoin standard adoption among companies, stating, “This legitimizes bitcoin and attracts more capital.” He pointed out the synergistic impact of companies adopting bitcoin, which facilitates price stabilization and potential increases. “Each market needs its own BTC companies, and as more join, it accelerates the transition to the bitcoin standard, pressuring others to join,” he added.
Addressing concerns regarding share dilution, CEO Fong Li reiterated the accretive nature of the proposed equity raises: “Issuing equity at greater than one times mNAV [the multiple of the company’s net asset value] is accretive, not dilutive. As mNAV rises, equity issuance becomes more like fixed income, and we aim to make the fixed income market more efficient.”
Despite reporting a $5.9 billion unrealized loss in the first quarter due to bitcoin price declines under new fair value accounting, CFO Andrew Kang maintained a positive outlook. “Despite the volatility, we believe the transparency is vital. We expect more positive swings over time, aligning with our long-term strategy,” he stated.
