Strategic Financial Maneuvers and BTC Torque: Justifying a Buy Rating for Strategy

In a report released today, Lance Vitanza from TD Cowen maintained a Buy rating on Strategy (MSTR – Research Report), with a price target of $590.00.

Lance Vitanza has given his Buy rating due to a combination of factors that highlight the strategic financial maneuvers of Strategy. The company recently acquired 7,390 bitcoins, primarily funded through its common stock ATM, which indicates a robust approach to leveraging its equity for asset accumulation. Additionally, the issuance of STRK preferred stock has reached unprecedented levels in both volume and pricing, suggesting a growing investor confidence and market appetite.
Lance Vitanza also introduces the concept of BTC Torque, a metric that evaluates the financial leverage associated with securities issuance by public bitcoin treasury companies like Strategy. The analysis shows that issuing common shares at a premium can significantly enhance shareholder value over time. Specifically, the issuance of common stock to purchase bitcoin could potentially yield substantial returns, with a calculated torque of 5.9x over a decade. This strategic financial positioning, particularly through the issuance of STRK preferred shares, is deemed highly beneficial for common shareholders, thereby justifying the Buy rating.

In another report released on May 15, BTIG also maintained a Buy rating on the stock with a $620.00 price target.

Based on the recent corporate insider activity of 64 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of MSTR in relation to earlier this year.