Shares of Strategy (MSTR), formerly known as MicroStrategy, rose 7% on Thursday, extending a rally that began earlier this week. The gains followed the company's announcement of a new financial framework centered on stock buybacks, selective Bitcoin sales, and active capital management.
The software firm, which has transformed into one of the largest corporate holders of Bitcoin, has been recovering from recent weakness. On Monday, the stock surged nearly 13% after the company unveiled its updated strategy. Despite the rebound, shares remain well below their April 2025 highs.
Citi Maintains Buy Rating, Lowers Price Target
Citi Research reiterated its Buy rating on Strategy while reducing its price target to $136 from $260. Analyst Peter Christiansen noted that the revised target reflects both the company's updated capital management strategy and Citi's revised 12-month outlook for Bitcoin prices.
Earlier this week, Christiansen described the new framework as effectively buying more time for the company until Bitcoin's price stabilizes. Under the updated plan, Strategy aims to strengthen cash reserves to support preferred dividend payments while using Bitcoin sales to finance share repurchases.
According to Christiansen, achieving the new $136 price target depends on a higher Bitcoin price over the next year and an expansion in Strategy's market-to-net asset value premium. The outlook also assumes that the company's preferred stock offerings recover to near their par values following an expected $1 billion in share repurchases.
Preferred Stock Under Pressure
Investor attention has increasingly focused on Strategy's Stretch preferred stock (ticker: STRC). For roughly the past year, STRC has been the company's primary vehicle for raising capital to fund additional Bitcoin purchases. However, the preferred shares recently fell to a record low, dropping well below their $100 par value.
Because Strategy can more easily issue new preferred shares when the stock trades at or above par, the decline has reduced the effectiveness of that financing strategy. The pressure on STRC comes as Strategy works to demonstrate its ability to fund dividend payments despite generating limited revenue from its legacy software business while holding a balance sheet dominated by Bitcoin.
Insider Buying Signals Confidence
Recent insider purchases have also drawn investor attention. CEO Phong Le's revocable trust made its first purchase of Stretch preferred shares on June 22, acquiring 11,000 shares at an average price of $90.80 per share, for a total investment of $998,800. Le also directly owns 126,323 shares of Strategy common stock along with several classes of preferred shares and indirectly holds Stretch preferred stock through his children.
Executive Vice President and General Counsel Thomas Chow also purchased preferred shares on June 16, buying 100 STRC shares at $92.71 each and 11 shares of STRK preferred stock at $66.10 per share.
On Monday, Le said the company was moving from 'one-way capital issuance to active capital management,' signaling a broader evolution in Strategy's financial approach beyond its role as a Bitcoin treasury company.
For context on broader market dynamics, see our analysis of Bitcoin Stalls Below $65K: Geopolitical Jitters, Weak Institutional Demand, and Strategy Concerns and Ethereum's 5-Year Stagnation Sparks Debate: Analysts Eye $4,630 Recovery Target.
This article is for informational purposes only and does not constitute financial advice.
