Wall Street broker Benchmark remains bullish on Strategy (MSTR) despite the stock’s recent struggles, arguing that its bitcoin-linked perpetual preferred shares give it something no other digital asset treasury can match: permanent capital.
The broker reaffirmed its strategy Buy rating and $705 price target in Thursday’s report. The stock was down 2% in early trading, around $324.
At an investor meeting hosted by Benchmark this week, Executive Chairman Michael Saylor explained how these instruments strengthen the company’s strategy.
While other companies are scrambling to replicate the strategy playbook, the company’s treasury of 640,031 BTC, more than twelve times that of the second largest corporate holder, remains unrivaled, said analyst Mark Palmer.
Its real advantage, Palmer said, is its perpetual preferred stock structure. These remove the refinancing risk associated with Bitcoin price fluctuations, giving the company a stable capital base without diluting equity.
Saylor framed the strategy as making Bitcoin the basis of a new fixed-income market, much as mortgage-backed securities transformed real estate, the report notes. Investors are buying in: July’s STRC offering raised $2.52 billion, the largest U.S. IPO this year.
Benchmark sees bitcoin-linked fixed income evolving into a multi-hundred billion dollar market, with strategy as its architect.
The broker’s price target reflects the projected value of bitcoin, a 10x multiple to expected earnings, and the company’s software business outlook through 2026.
Learn more: The strategy’s Bitcoin gains in the third quarter were $3.9 billion; No weekly purchases for the first time since April
