TD Cowen has reaffirmed its $260 price target and buy rating on Strategy (formerly MicroStrategy), signaling confidence despite the company's $8.22 billion second‑quarter net loss. The firm highlighted Strategy's primary focus on restoring its STRC preferred stock to par value, a move seen as critical to stabilizing the company's capital structure and its Bitcoin acquisition strategy.
The massive quarterly loss stemmed largely from an $8.32 billion impairment on Bitcoin holdings as the cryptocurrency's price dropped about 40% from year‑earlier levels. Strategy continued buying through the downturn, growing its Bitcoin stash to 846,000 BTC during the quarter, though it later sold 3,620 BTC to meet preferred‑stock obligations. By late July, holdings stood at approximately 843,775 BTC.
STRC, a variable‑rate perpetual preferred stock, has become a cornerstone of Strategy's financing model. Its stated value nearly doubled during Q2 to $10.5 billion, with the company raising $7.53 billion through STRC in the first seven months of the year. Institutional ownership of STRC more than tripled to $3.1 billion, holding 29% of the stock, while retail investors still dominate at 71% with an average position of $48,000.
However, STRC's market price fell to as low as $74.57 in May, far below its $100 par value, reducing the efficiency of new issuance. Management attributed part of the decline to an overly aggressive Bitcoin buying strategy that squeezed the dollar reserve, which had fallen to just $871 million. Strategy has since rebuilt that reserve to $3.75 billion, covering an estimated 2.1 years of dividends and interest.
Chief Executive Phong Le stated that the experience forced a rebalancing between Bitcoin accumulation and liquidity support for STRC. The company has fixed the dividend rate at 12%, authorized a $1 billion buyback (of which $25 million has been used), and set September 8 as an informal benchmark for restoring STRC to par. This timeline is based on the 70 trading days it took the stock to rise from $90 to $100 after its July 2025 launch.
Michael Saylor acknowledged a $1.2 billion gap between STRC’s $9.2 billion market cap and $10.5 billion stated value, but insisted Strategy has “the means to return STRC to par,” citing its $58.5 billion Bitcoin reserve. Returning the preferred stock to par would enable the company to resume large‑scale digital credit issuances and support its goal of doubling Bitcoin per diluted share within seven years.
