TLDR
- Strategy stock declined 5.7% to $125.66 Wednesday, heading for its lowest close since September 2024
- Canaccord Genuity reduced its price target from $474 to $185, a 60% cut, while maintaining a Buy rating
- The company holds 713,502 Bitcoins worth approximately $53.6 billion as Bitcoin trades around $73,000
- Strategy’s market-to-net-asset-value ratio compressed to 1.06x from premiums that once exceeded 2x
- Canaccord predicts Bitcoin will rise 20% in 2026 and Strategy will achieve a 1.25x valuation multiple
Strategy stock dropped 5.7% to $125.66 Wednesday following a major price target cut from Wall Street. Canaccord Genuity reduced its target by 60% while keeping a positive outlook.
The firm lowered its price target from $474 to $185. Canaccord maintained its Buy rating on the stock.
Strategy has fallen 72% since July. The stock was heading for its lowest close since September 9, 2024.
Bitcoin’s decline drove Strategy lower. The cryptocurrency dropped to around $73,000 after peaking above $126,000 in October.
Strategy owns 713,502 Bitcoins valued at approximately $53.6 billion. The company’s average cost per coin is $76,052.
Premium Vanishes as Bitcoin Drops
Strategy’s valuation premium has disappeared. The stock now trades at a 1.06x market-to-net-asset-value ratio. The company previously commanded premiums above 2x its Bitcoin holdings.
Bitcoin fell below Strategy’s average purchase price. This sparked concerns about the company’s ability to service debt and pay dividends.
Canaccord analyst Joseph Vani rejected those worries. Strategy has $8 billion in convertible debt against $53.6 billion in Bitcoin assets.
Vani said modest share sales can cover preferred stock dividends. He described Strategy’s financial structure as built for crypto volatility.
The analyst believes Bitcoin has been mischaracterized as a risk asset. Vani argues the cryptocurrency functions as a store of value.
Bitcoin Rally Expected in 2026
Canaccord forecasts Bitcoin will gain approximately 20% in 2026. The firm acknowledged difficulty predicting the exact timing.
Strategy won’t regain its historic premium levels quickly. Canaccord expects the stock to trade at a 1.25x multiple to Bitcoin assets.
“MSTR shares remain a bit of a lightning rod for media attention when BTC is weak,” Vani wrote. He said the company’s model was designed for market turbulence.
Strategy reports fourth-quarter earnings Thursday. The company will likely show an unrealized loss due to Bitcoin’s quarterly decline.
Vani noted Bitcoin’s trajectory matters more than quarterly figures. Strategy’s stock performance tracks cryptocurrency price movements closely.
The company created the corporate Bitcoin treasury model. Strategy issues equity and debt instruments to buy Bitcoin.
Bitcoin hit its lowest point in over a year Tuesday. The digital currency’s weakness has pressured Strategy throughout the downturn.
Canaccord believes Bitcoin’s selloff may be ending. The firm sees current prices as undervalued.
Strategy’s debt load remains manageable relative to its Bitcoin position. The company’s cryptocurrency holdings dwarf its obligations.
Vani highlighted Bitcoin’s key attributes as a value store. He pointed to scarcity and verifiability as core strengths.
Strategy pioneered using corporate balance sheets for Bitcoin accumulation. The approach attracted investor attention during Bitcoin’s 2024 rally.
The stock’s collapse mirrors broader cryptocurrency market weakness. Bitcoin became correlated with risk assets during the recent decline.
