Strategy (MSTR) Stock Falls 19% Amid Bearish Analyst Forecasts

Strategy's stock (MSTR) has declined nearly 20% since last month amid a broader market correction. Analyst Gus Galá from Monness, Crespi, Hardt maintains a Sell rating with a price target of $175.

Analyst Cautions Against Long Positions In Strategy

  • Shares fell 2.4% on Thursday, closing at $336.48.
  • The company is the largest corporate holder of Bitcoin, holding over 600,000 BTC.
  • Despite a 140% increase in stock value over the past year, the volatility of Bitcoin poses risks.
  • Galá notes that a sustained bull run in Bitcoin is necessary for stock recovery.
  • Current market cap-to-Bitcoin ratio is 1.34-to-1; caution advised against both short and long positions.
  • Skepticism exists regarding the sustainability of the market cap multiple due to credit concerns related to Bitcoin acquisitions.

Crypto Stocks Suffer Setbacks

  • Credit agencies unlikely to grant investment-grade ratings to Strategy due to reliance on unrealized Bitcoin gains.
  • Stable Bitcoin perception needed for favorable debt terms.
  • Bitcoin valuation has dropped 9% from recent highs, currently consolidating between $112,000 and $113,000.
  • Circle’s shares fell 4% post-IPO excitement.
  • Coinbase’s shares approached $300 support, down 2.5% from Wednesday.

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