TLDR
- Canaccord Genuity slashed Strategy’s price target by 60% to $185 but kept its Buy rating on the stock
- Strategy stock fell 5.7% to $125.66 on Wednesday, heading toward its lowest close since September 2024
- The company holds 713,502 Bitcoins worth approximately $53.6 billion, with Bitcoin down to around $73,000 from October’s $126,000 peak
- Strategy’s market-to-net-asset-value ratio has compressed to 1.06 from premiums that previously exceeded 2x
- Canaccord expects Bitcoin to rebound about 20% in 2026 and Strategy shares to reach a 1.25x premium to underlying Bitcoin assets
Strategy stock continued its decline Wednesday as shares dropped 5.7% to $125.66. The move came after Canaccord Genuity slashed its price target on the Bitcoin-holding company by 60%.
The firm reduced its target from $474 to $185. Despite the drastic cut, Canaccord maintained its Buy rating on Strategy.
The price target adjustment reflects Bitcoin’s steep decline from its October peak. The cryptocurrency hit record highs above $126,000 before plummeting to around $73,000.
Strategy stock has mirrored Bitcoin’s downturn. Shares have fallen 72% since July, according to Dow Jones Market Data. Wednesday’s decline put the stock on track for its lowest close since September 9, 2024.
Bitcoin Holdings Under Pressure
Strategy owns 713,502 Bitcoins valued at approximately $53.6 billion. The company’s average purchase price stands at $76,052 per coin.
Bitcoin recently dipped below that average cost. This development raised concerns about Strategy’s ability to meet debt and dividend obligations.
The company’s premium to its Bitcoin holdings has evaporated. Strategy’s market-to-net-asset-value ratio now sits at 1.06. Investors previously paid multiples exceeding 2x the value of Bitcoin on Strategy’s balance sheet.
Canaccord analyst Joseph Vani addressed the debt concerns directly. Strategy holds $8 billion in convertible debt against its $53.6 billion Bitcoin position. The firm believes this gap provides adequate cushion.
Dividend Payments Remain Serviceable
Vani argued that dividend payments on preferred stock can be covered through modest share sales. He described Strategy’s business model as built to withstand a harsh crypto winter.
“MSTR shares remain a bit of a lightning rod for media attention when BTC is weak,” Vani wrote. He suggested the underlying business structure was designed thoughtfully for downturns.
The analyst believes Bitcoin has been misclassified as a risk asset. Vani argues the cryptocurrency should trade as a store of value instead.
“Bitcoin remains a compelling store of value, checking all key boxes,” he wrote. Vani listed scarcity and verifiability as key attributes.
Canaccord expects Bitcoin prices to rebound approximately 20% in 2026. The firm acknowledged difficulty in timing the recovery.
The analyst doesn’t expect Strategy’s premium to return to previous levels. Canaccord projects shares will reach a 1.25x multiple relative to underlying Bitcoin assets.
Strategy reports fourth-quarter financial results Thursday. Canaccord expects the company to post an unrealized loss due to Bitcoin’s quarterly decline.
Vani noted that Bitcoin’s outlook matters more than Strategy’s quarterly print. The stock’s performance remains tied to cryptocurrency price movements.
Strategy currently trades near levels last seen in September 2024. The company pioneered the digital-asset treasury model by issuing equity and debt to purchase Bitcoin.
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