Strategy Stock Still a Buy at Cantor After Plunge Forces Major Price Target Cut

Cantor Fitzgerald analyst Brett Knoblauch significantly cut the 12-month price target for Strategy (MSTR) from $560 to $229 following a steep decline in Bitcoin's price, though the new target still implies nearly 30% upside, maintaining an overweight rating. The core issue is that Strategy's business model, which relies on issuing equity at a premium to buy Bitcoin, is constrained because its fully adjusted market net asset value (mNAV) multiple has fallen to 1.18x, threatening its ability to raise capital without diluting shareholders. Knoblauch slashed projected annual capital market proceeds from $22.5 billion to $7.8 billion. However, Cantor remains confident that the strategy will work again if Bitcoin recovers. Separately, Mizuho noted that Strategy has built a significant cash reserve following a recent equity raise, providing flexibility to cover dividends and avoid selling Bitcoin. CFO Andrew Kang indicated the firm will only return to issuing new equity when its mNAV exceeds 1, viewing Bitcoin sales only as a last resort.

(Source：CoinDesk)