Shares of Strategy Inc. (MSTR), the Bitcoin treasury company led by Michael Saylor, slipped in early Monday trading after the firm sold $108.6 million worth of Bitcoin (BTC-USD). The latest sale marks the company’s fourth consecutive week of selling Bitcoin as it buys back preferred shares and boosts its cash reserve.
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Strategy Sells More Bitcoin to Bolster USD Reserve
Strategy disclosed in an SEC filing on Monday, August 10, that it sold 1,690 Bitcoin at a loss of about $11,123 per coin. The company’s purchase price was $75,385 per BTC, while it sold the coins for around $64,262 each, resulting in a total loss of roughly $18.8 million. The sale generated around $108.6 million and reduced Strategy’s total Bitcoin holdings to 840,447 BTC.
The latest sale drew a different response from investors than the previous one. MSTR rose about 2.3% on August 3 after Strategy disclosed its earlier $104.7 million Bitcoin sale. However, the shares opened about 0.55% lower on Monday and later fell more than 3.37% after news of the Bitcoin sale spread. The stock is now trading around $96.64, below its previous close near $100, according to TipRanks data.
Strategy’s Stock Faces More Price-Target Cuts
Alongside the Bitcoin sale, Strategy sold about 6.59 million Class A shares through its at-the-market program. The offering raised roughly $653 million, with most of the proceeds going into the company’s USD Reserve.
However, selling both MSTR shares and Bitcoin has raised concerns about shareholder dilution. It also marks a shift from Strategy’s earlier focus on accumulating Bitcoin.
In response to the developments, Strategy’s stock has faced several price-target cuts from Wall Street analysts over the past few days. On August 10, Dan Dolev from Mizuho Securities, the investment banking and securities arm of Japan’s Mizuho Financial Group (MFG), lowered his price target for MSTR to $165 from $213. The analyst kept his Outperform rating, citing updated Bitcoin price assumptions for the cut.
On August 7, Ramsey El Assal of financial services firm Cantor Fitzgerald kept a Buy rating and maintained his price target around $186. However, Matthew Galindo from investment bank Maxim Group and Barclays (BARC) analyst Nik Cremo both slashed their price targets. Galindo cut his from $250 to $215, while Cremo reduced his target from $130 to $125.
Is Strategy Stock a Good Buy?
According to TipRanks data, Strategy (MSTR) carries a Strong Buy consensus rating from 13 analysts, with 12 Buys and 1 Hold. The stock also has a projected 12-month average price target of $257.75, implying about 165.39% upside. (See MSTR stock forecast)
