Investment firms TD Cowen and Benchmark have reaffirmed their "buy" recommendation for Strategy's stock and approved the company's decision to increase its cash reserves. This information was reported by The Block.

Experts consider the move to hold more cash as a necessary step for future Bitcoin purchases rather than a departure from the company’s previous strategy. During a recent investor call discussing the second quarter results, Strategy's Executive Chairman, Michael Saylor, announced that the firm's reserves would no longer consist solely of cryptocurrency.

Despite a unified recommendation, analysts provided differing price targets:

  • Benchmark lowered its target from $570 to $435, incorporating a Bitcoin price of $100,000 by the end of 2026 instead of the previous $125,000;
  • TD Cowen projected a price of $260 per share;
  • Mizuho simply noted that the firm is "weathering the storm" amid a decline in digital gold prices.

Primary Focus

During the call, Strategy's leadership emphasized that a key priority would be to bring the price of STRC preferred shares back into the $99-100 range. Saylor explained that demand for these "short-term low-volatility debt instruments" is 50 to 100 times greater than interest in any other asset the company holds. As a result, the company plans to focus its efforts on this single product rather than developing new ones.

From March to July, institutional investments in STRC surged from $1.1 billion to $3.1 billion. Their share of the total increased from 22% to 29%, and the average investment doubled to $3.5 million.

According to the firm, the rise in STRC stock prices is crucial for these shares to once again serve as the primary vehicle for raising funds to purchase Bitcoin. Currently, the discount between nominal and market value stands at approximately $1.2 billion. Following the last trading session, Strategy's stock price fell over 4% to $93.28, marking a decline of 38.6% since the beginning of the year.

Source: Yahoo Finance.

It's worth noting that on July 30, Strategy released its financial report for the second quarter, revealing a net loss exceeding $8 billion for the April to June period. The company's CEO, Fong Lee, stated that the firm will continue to sell the leading cryptocurrency as commercial viability allows.