Strategy Inc. Slides 10% After Bitcoin Strategy Overhaul, Cowen Cuts Target to $260
MSTR•Strategy Inc. shares plunged nearly 10% after unveiling a capital-structure reset that allows selling Bitcoin for liquidity and repurchases, sparking doubt over its accumulation plan. TD Cowen cut its target to $260 from $400 on a lower 2026 Bitcoin forecast of $100,000, as MSTR held $2.55 billion in U.S. dollar reserves.
1. Capital-Structure Reset Details
Strategy Inc. rolled out a revised capital-structure and Digital Credit Capital Framework that gives management flexibility to monetize Bitcoin for liquidity, authorized up to $1 billion each in preferred securities and common-stock repurchases, raised its STRC dividend rate to 12%, and established a board-approved U.S. dollar reserve policy.
2. Investor Reaction and Stock Movement
Shares of Strategy Inc. declined nearly 10% on the announcement, erasing recent gains as investors questioned the company’s commitment to ongoing Bitcoin accumulation. Bitcoin itself slipped over 3% toward $58,000, reflecting broader concerns about demand reliability from one of its largest corporate holders.
3. Analyst Update and Price Target Adjustment
TD Cowen maintained its Buy rating but lowered Strategy’s price target from $400 to $260, driven by a reduced Bitcoin forecast of $100,000 for end-2026 and $135,000 for 2027. The firm left its 3x earnings multiple unchanged, noting the new target still implies significant upside from recent share levels.
4. Reserve Position and Dividend Coverage
As of June 28, Strategy Inc. held $2.55 billion in U.S. dollar reserves, sufficient to cover preferred dividends and interest expense for over 17 months. This reserve policy aims to bolster balance-sheet strength during periods of market volatility.
