Benchmark Affirms Strategy’s Role in Bitcoin-Backed Fixed Income Market
Benchmark maintains a positive outlook on Strategy (MSTR) due to its bitcoin-linked perpetual preferred shares, which provide permanent capital.
The broker reaffirmed a buy rating with a $705 price target; the stock was at $324, down 2% in early trading.
Executive Chairman Michael Saylor emphasized the strength of these financial instruments in a recent investor meeting.
Strategy holds 640,031 BTC, significantly more than any other corporate entity.
The perpetual preferred shares mitigate refinancing risks associated with bitcoin's price fluctuations, offering a stable capital base without diluting common equity.
Saylor aims to establish bitcoin as the basis for a new fixed income market, similar to how mortgage-backed securities transformed real estate.
The STRC offering in July raised $2.52 billion, marking the largest U.S. IPO this year.
Benchmark anticipates the evolution of bitcoin-linked fixed income into a multi-hundred-billion-dollar market, led by Strategy.
The price target reflects anticipated bitcoin value, a 10x multiple on expected gains, and the company's software business prospects through 2026.
