In a bold move signaling its commitment to cryptocurrency, Strategy (NASDAQ:MSTR) has filed to sell up to $21 billion of its common stock. This announcement, made on May 1, 2025, underscores the company’s strategy to fully embrace a Bitcoin treasury standard, a plan that has been in motion since 2020 when the firm's co-founder Michael Saylor first ventured into Bitcoin investments.
Strategy, formerly known as MicroStrategy, has entered into sale agreements with several financial institutions, including TD Securities (USA) LLC, The Benchmark Company, LLC, BTIG, LLC, Canaccord Genuity LLC, and Cantor. This extensive network of partners will help facilitate the stock sale, which aims to bolster the company’s already significant Bitcoin holdings.
As of now, Strategy’s stock has surpassed $400 for the first time since the third quarter of 2024. Investors are showing strong confidence in the company's Bitcoin-focused strategy, with shares currently trading between $381 and $400. Analysts have set an average target price of $446, with some speculating it could soar as high as $600. This optimistic outlook is largely attributed to the company’s impressive track record of accumulating Bitcoin, which has grown at a compound annual growth rate (CAGR) of 59% from 2020 to 2024.
Since adopting the Bitcoin Standard, Strategy's stock has skyrocketed more than 3,000%. In a celebratory post on social media platform X, Executive Chairman Michael Saylor remarked, "MSTR is now up more than 3000% since adopting the Bitcoin Standard." This growth has transformed the perception of Strategy’s stock, with many investors viewing it as a proxy for Bitcoin itself, despite its origins as a software firm.
Looking ahead, analysts remain positive about Strategy’s potential. Some predict that if Bitcoin maintains a price above $95,000, the stock could reach $600 by May 2025. However, investors are keenly awaiting the company’s Q1 2025 earnings release, which is scheduled for May 1, 2025, after market close. Expectations are for a loss per share of $0.11, an improvement over the $0.31 loss reported in the same quarter last year. Revenue is anticipated to be $116.6 million, reflecting a modest 1.2% increase from the previous year.
Despite the positive sentiment surrounding Strategy, not all analysts share the same enthusiasm. Monness analyst Gus Galá has expressed skepticism about the company’s prospects, citing concerns over the limited uptake of the BTC Treasury Strategy in bond markets. He commented, "Recall, we are bearish owing to our view of little uptake of the BTC Treasury Strategy by bond markets and the concentration of folks pursuing these strategies." Galá’s analysis highlights the competitive landscape, noting that several companies are vying for the same pool of capital.
Galá also pointed out that the effectiveness of Strategy’s 21/21 Plan—a capital-raising strategy aimed at adding $21 billion through equity and another $21 billion through fixed-income instruments to fund further Bitcoin acquisitions—has been hampered by recent “implied volatility.” He believes that the lack of interest in newer financial instruments, such as preferred stock offerings STRK and STRF, indicates that the company’s funding options may be dwindling.
In his assessment, Galá maintained a Sell rating on Strategy’s shares, with a price target of $175, suggesting a potential decline of approximately 55% in the coming months. This outlook contrasts sharply with the consensus view among other analysts, who have rated the stock as a Strong Buy. The average target price among the 13 other analysts is projected to yield one-year gains of around 34%, with the consensus target clocking in at $508.21.
As Strategy continues to navigate the volatile landscape of cryptocurrency investment, the company’s future hinges on its ability to manage its Bitcoin portfolio effectively while also addressing the challenges posed by market dynamics and competition. Investors are closely watching how the company will leverage its upcoming earnings report and the broader implications of its capital-raising efforts.
In summary, Strategy’s ambitious plans to expand its Bitcoin holdings through a significant stock sale reflect its confidence in the cryptocurrency market. With a track record of remarkable growth and a strong backing from analysts, the company is poised to make waves in the financial sector. However, the mixed sentiments from analysts like Gus Galá serve as a reminder of the inherent risks and uncertainties that accompany such bold strategies in the ever-evolving world of digital currencies.
