Strategy shares fall after earnings, but analysts see path to more bitcoin buying
Strategy stock drops after earnings, but analysts remain bullish
Strategy (MSTR) fell nearly 10 percent on Friday after reporting third-quarter results. The company, a bitcoin treasury company that holds bitcoin as a reserve asset, saw its stock trade down 8.7 percent to $129.90 on Friday morning. The shares are down about 27 percent for the year.
Despite the drop, analysts from StoneX and TD Cowen maintained buy ratings on the stock. They said a stronger cash reserve and a more stable preferred-stock financing structure put Strategy in a better position to resume buying bitcoin.
Key details from the report
- Strategy ended the third quarter with $5.07 billion in dollar assets, including a $4.83 billion cash reserve.
- The cash reserve covers roughly 3.2 to 3.4 years of preferred dividends and debt interest, according to the analyst reports.
- The company spent about $2 billion repurchasing its STRC preferred stock, helping return the shares to near their $100 par value.
- Strategy's bitcoin per share fell 3.7 percent year to date as the company focused on cash reserves and preferred securities instead of buying more bitcoin.
- StoneX kept a buy rating and a $435 price target. TD Cowen kept a buy rating and a $260 price target.
What StoneX and TD Cowen say
StoneX analyst Mark Palmer said shareholders approved a change this week allowing dividends on preferred shares to accrue daily. The change takes effect November 1 for STRC shares and January 1 for STRF, STRK, and STRD shares. Management said the goal was to reduce volatility, improve liquidity, broaden demand, and move the instruments toward a tokenized, around-the-clock market.
TD Cowen analysts wrote that deeper distribution and better liquidity could increase Strategy's ability to issue Digital Credit efficiently. Digital Credit is a financing product used by the company. They said this connection to common-equity holders matters more than the STRC trading price by itself.
Confirmed facts
- Strategy's stock fell nearly 10 percent after third-quarter earnings and traded at $129.90 on Friday morning.
- The company ended the quarter with $4.83 billion in cash out of $5.07 billion in dollar assets.
- StoneX and TD Cowen both maintained buy ratings on MSTR.
- Preferred shareholders approved daily dividend accruals effective November 1 for STRC and January 1 for the other preferred securities.
What remains uncertain
The article reports that analysts believe Strategy is better positioned to resume accumulating bitcoin and grow bitcoin per share. This is an analyst view, not a company announcement. The sources do not say when or if Strategy will restart bitcoin purchases.
It is also unclear whether the daily dividend change will achieve management's stated goals of reducing volatility and improving liquidity.
Why this matters
A steadier preferred-stock structure and larger cash reserve could let Strategy issue Digital Credit more efficiently, according to TD Cowen. That capacity is tied to the company's common-equity holders and its ability to grow bitcoin per share over time.
Upcoming dates
Daily dividend accruals begin on November 1 for STRC preferred shares and on January 1 for STRF, STRK, and STRD preferred shares.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.