For years, Strategy (MSTR), formerly MicroStrategy, built its reputation on one simple idea: buy Bitcoin (BTCUSD) and never sell it. That changed last week when the company disclosed it sold $216 million worth of Bitcoin to help fund preferred stock dividends. The move surprised investors because it marked a shift from the company's long-standing buy-and-hold strategy.
Strategy said it sold 3,588 Bitcoin last week under a new treasury framework aimed at supporting preferred stock obligations and boosting liquidity. The sale reduced its holdings to 843,775 Bitcoin, acquired at an average cost of $74,476 per token.
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The Bitcoin Sale Explains the Recent Stock Weakness
Strategy's stock has remained one of the most volatile names in the market because its value is closely tied to Bitcoin prices.
Following news of the $216 million Bitcoin sale, shares fell roughly 6% as investors questioned whether the company was moving away from its long-standing accumulation strategy. The decline followed a sharp rally of more than 22% the previous week, driven by renewed optimism around Bitcoin and large institutional buying.
Over the past year, MSTR stock has fallen roughly 75%, while the stock remains down about one-third year-to-date (YTD). Besides weaker Bitcoin prices, investors have also worried about dilution from repeated preferred stock offerings and convertible debt issued to finance additional Bitcoin purchases.
www.barchart.com Stronger Revenue but Massive Bitcoin-Driven Losses
Strategy's latest quarter was a mixed one. Revenue climbed 12% year-over-year (YoY) to $124.3 million, slightly ahead of Wall Street expectations, helped by growth in its software business. The company, however, missed earnings expectations after reporting a net loss of $12.5 billion, or $38.25 per share, largely because of a $14.5 billion unrealized Bitcoin loss under new accounting rules.
Despite the headline loss, the company's underlying software operations remained stable. Strategy finished the quarter with about $2.21 billion in cash while holding roughly 818,000 Bitcoin, making it the world's largest corporate Bitcoin owner. Management believes the business can return to adjusted profitability during 2026 as software revenue and digital credit products continue to grow.
Strategy Is Changing How It Manages Its Bitcoin Business
Strategy is no longer just a software company with a Bitcoin treasury.
Over the past year, it has built a fast-growing digital credit business through preferred securities such as (STRC), (STRF), and (STRD). These products have raised more than $13 billion, with much of the proceeds used to purchase additional Bitcoin.
The company has also repurchased about $1.5 billion of convertible debt to strengthen its balance sheet. More importantly, the board recently approved new capital management policies allowing management to sell Bitcoin, repurchase shares, or buy back preferred stock whenever it believes doing so creates shareholder value. Last week's Bitcoin sale appears to be the first major example of this more flexible strategy.
What Analysts Think About MSTR Stock
While the recent Bitcoin sale shook things up, Wall Street continued to be relatively bullish on MSTR stock. Earlier this year, TD Cowen upgraded its price target for the stock to $400.
Earlier, TD Cowen also upgraded its price forecasting call for MSTR to $400 and a robust “Buy” rating, emphasizing Strategy's quick Bitcoin accumulation and more efficient financing tactics. The company said that the firm has maintained a consistent and "aggressive" rate of purchase for Bitcoin, leaving it the owner of approximately 4% of the total amount of Bitcoin mined to date.
While Mizuho cut its $265 price target to $213, it maintained its “Outperform” rating as it believes that much of Bitcoin's recent decline is already priced in. The firm also anticipates becoming profitable in 2026 through its strategy.
Overall, Strategy has a “Strong Buy” consensus, and the recent mean price estimate is around $318, implying that MSTR stock could more than triple from its price level in the coming year.
www.barchart.com On the date of publication, Nauman Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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