Benchmark Equity Research has reiterated its Buy rating and $570 price target on Strategy (MSTR) following a volatile week for the company’s STRC perpetual preferred stock and the announcement of another Bitcoin purchase. The target implies about 406% upside from Friday's closing price of $112.53, which was down 3.5% on the session.
Analyst Mark Palmer addressed comparisons between STRC’s recent trading weakness and the collapse of TerraUSD/Luna, stressing that STRC is “not a stablecoin” and operates under a fundamentally different structure. He described it as a perpetual preferred stock with a variable dividend rate backed by Strategy’s treasury of over 847,000 BTC, worth roughly $55 billion. Palmer argued the selloff was “a market-driven reset of required yield” rather than a depeg, highlighting the company’s $1.4 billion cash reserve and the liquidity profile of the instrument.
In a separate 8-K filing, Strategy disclosed it had purchased 520 Bitcoin between June 15 and June 21 for approximately $34.9 million at an average price of $67,068 per BTC. The acquisition was funded through an at-the-market equity program that generated $335.5 million by selling 2.71 million Class A common shares. Following the purchase, Strategy’s total Bitcoin holdings reached 847,363 BTC acquired for $64.1 billion at an average cost of $75,651 per coin, leaving the position below its cost basis while Bitcoin traded near $65,000.
JAN3 CEO Samson Mow weighed in on the STRC debate, noting the preferred shares have a “self-repairing mechanism” when trading below par. Because dividends are calculated against the $100 stated amount, lower market prices increase the effective yield, creating pull-to-par incentives. He added that below-par trading prompts Strategy to halt new at-the-market issuances, limiting further dividend obligations. MSTR stock rose about 3% in premarket trading following the Bitcoin purchase disclosure.
Benchmark views the recent pressure on STRC and common shares as a stress test of the funding model rather than a breakdown, pointing to the company’s ability to adjust its capital structure and continued reliance on Bitcoin-backed balance sheet strength.
