Benchmark, a Wall Street brokerage firm, maintains its optimistic stance on Strategy (MSTR) despite recent challenges faced by the stock. They assert that the company’s perpetual preferred shares linked to bitcoin offer an unparalleled advantage: enduring capital.
The brokerage reaffirmed its buy rating for Strategy and set a price target of $705 in their Thursday report. Early trading saw the stock dip by 2%, settling around $324.
During an investor meeting organized by Benchmark this week, Executive Chairman Michael Saylor elaborated on how these financial instruments bolster the company’s strategic approach.
While competitors strive to emulate Strategy’s blueprint, analyst Mark Palmer highlighted that with a treasury holding of 640,031 BTC—over twelve times larger than any other corporate holder—Strategy remains unmatched.
Palmer emphasized that the true advantage lies in their perpetual preferred shares’ structure. This setup eliminates refinancing risks associated with bitcoin’s volatile price changes and provides a stable capital foundation without affecting common equity.
Saylor described this strategy as akin to transforming bitcoin into a cornerstone for developing new fixed income markets, similar to how mortgage-backed securities revolutionized real estate finance. The report mentioned investors are showing interest; July’s STRC offering amassed $2.52 billion—the largest U.S. IPO this year.
Benchmark anticipates that fixed income products tied to bitcoin will evolve into a market worth hundreds of billions of dollars, with Strategy leading its development.
The broker’s price target is based on projected increases in bitcoin value—a tenfold multiplier on anticipated gains—and forecasts regarding the company’s software business through 2026.Read more: Strategy Q3 Bitcoin Gains Were $3.9B; ; No Weekly Buys for First Time Since April