TLDR
- Strategy stock dropped 5.7% to $125.66 Wednesday, tracking toward its lowest close since September 2024
- Canaccord Genuity maintained a Buy rating while cutting its price target from $474 to $185, a 60% reduction
- The company’s 713,502 Bitcoin holdings are valued at $53.6 billion as Bitcoin trades around $73,000
- Strategy’s premium to Bitcoin assets compressed to 1.06x from previous multiples exceeding 2x
- Analyst expects Bitcoin to rally 20% in 2026 and Strategy to reach a 1.25x valuation multiple
Strategy stock extended its losing streak Wednesday with a 5.7% decline to $125.66. The drop followed Canaccord Genuity’s decision to cut its price target by 60%.
The firm lowered its target from $474 to $185. Canaccord maintained its Buy rating despite the substantial reduction.
Strategy shares are down 72% since July. Wednesday’s decline put the stock on pace for its lowest close since September 9, 2024.
The price target cut reflects Bitcoin’s sharp decline. The cryptocurrency dropped to around $73,000 after hitting record highs above $126,000 in October.
Strategy holds 713,502 Bitcoins worth approximately $53.6 billion. The company’s average purchase price is $76,052 per coin.
Bitcoin Premium Evaporates
Strategy’s valuation premium has collapsed. The stock’s market-to-net-asset-value ratio now stands at 1.06. Investors previously paid more than 2x the value of Strategy’s Bitcoin holdings.
Bitcoin recently traded below Strategy’s average cost. This sparked worries about the company’s debt and dividend payments.
Canaccord analyst Joseph Vani dismissed those concerns. Strategy carries $8 billion in convertible debt against $53.6 billion in Bitcoin assets.
Vani said dividend payments on preferred stock can be funded through modest share sales. He described Strategy’s structure as built to survive a prolonged crypto downturn.
Bitcoin Rebound Expected
The analyst believes Bitcoin has been incorrectly treated as a risk asset. Vani argues it should trade as a store of value based on scarcity and verifiability.
“MSTR shares remain a bit of a lightning rod for media attention when BTC is weak,” Vani wrote. He suggested the business model was designed for market volatility.
Canaccord projects Bitcoin will rebound approximately 20% in 2026. The firm acknowledged uncertainty around timing the recovery.
Strategy won’t recapture its previous premium anytime soon. Canaccord expects shares to reach a 1.25x multiple relative to Bitcoin assets.
Strategy reports fourth-quarter earnings Thursday. The company will likely post an unrealized loss due to Bitcoin’s quarterly decline.
Vani emphasized Bitcoin’s outlook matters more than quarterly results. Strategy’s performance remains directly tied to cryptocurrency prices.
The company pioneered the digital-asset treasury strategy. Strategy issues equity and debt to accumulate Bitcoin holdings.
Bitcoin hit its lowest point in over a year Tuesday. The cryptocurrency’s weakness has pressured Strategy stock throughout the downturn.
Canaccord believes Bitcoin’s sell-off may be nearing an end. The firm sees the cryptocurrency as undervalued at current levels.
Strategy’s convertible debt remains manageable relative to its Bitcoin position. The company’s holdings provide substantial coverage for its obligations.
