A quiet revolution often begins with a bold statement. For Strategy, the company known for its deep commitment to Bitcoin, that moment might just be here. They recently reported record profits, pushing their Bitcoin gains past the $20 billion mark. Wall Street analysts, usually a skeptical bunch, are cheering. They see a company not just holding Bitcoin, but building a powerful financial engine around it.
- Strategy is transforming into a corporate treasury machine, generating Bitcoin-denominated returns.
- The company is launching a new capital strategy, including a preferred share class called Stretch (STRC), to boost Bitcoin exposure.
- Analysts are optimistic about Strategy’s future, with some raising price targets and highlighting its innovative approach to capital raising.
Think of it like this: a company reports an operating income of $14 billion. That kind of number should grab every headline, right? Benchmark analyst Mark Palmer certainly thought so. He described Strategy executives delivering a “two-hour masterclass” on their long-term vision. That vision is grand: to become the world’s largest corporate treasury, full stop.
Executive Chairman Michael Saylor and CEO Phong Le spent their recent conference call laying out a new capital strategy. This plan aims to boost the company’s Bitcoin exposure. It also wants to turn its treasury into a profit machine. The star of this new approach is a preferred share class called Stretch, or STRC. Saylor himself called it the company’s “iPhone moment.”
The New Blueprint: Stretch and Beyond
What exactly is this “iPhone moment” for Strategy? It’s about more than just buying Bitcoin. It’s about how they fund those purchases and manage their holdings. The new STRC shares, launched on July 21, are a key part of this. They are a Bitcoin-backed preferred stock. They pay a variable monthly dividend.
Each STRC share is priced at $100. Strategy plans to keep that price steady. They will adjust dividends, issue shares, and use call options as needed. The dividend starts at 9% annually. It gets paid monthly. This rate will change each month based on market conditions.
STRC is designed for investors who want a steady monthly income. They don’t want big price swings. It’s similar to money-market funds or short-term bonds. But it offers a higher yield. Why? Because it’s backed by Bitcoin, not U.S. Treasurys. It’s a different kind of stability, tied to a digital asset.
STRC joins other perpetual preferred shares Strategy already offers. These shares have no maturity date. They offer fixed dividend payments as long as the company operates. There’s Strike (STRK), which is convertible and pays an 8% fixed dividend. Then there’s Strife (STRF), non-convertible with a 10% fixed cumulative dividend. And Stride (STRD) offers a fixed 10% non-cumulative annual dividend. It is also non-convertible.
Saylor explained the shift. Convertible notes worked well when Strategy first started buying Bitcoin. Now, preferred equity offers a different path. It’s perpetual, meaning it lasts forever. It’s non-dilutive, so it doesn’t reduce the value of existing shares. It also avoids refinancing risk. This strengthens the company’s financial structure.
Benchmark analysts put it plainly. Strategy is not just buying Bitcoin anymore. It is engineering a “corporate treasury machine.” This machine is designed to generate Bitcoin-denominated returns. It manages capital raises with precision. And it aims to scale faster. Benchmark reiterated a “buy” rating on MSTR. They raised their price target to $705.
These new programs add to Strategy’s existing “42/42” plan. That plan targets a total capital raise of $84 billion. This comes from equity offerings and convertible notes. The goal is to acquire more Bitcoin through 2027. As of July 31, Strategy holds 628,791 BTC. Their cost for this Bitcoin is $46.07 billion. That works out to $73,277 per Bitcoin.
Management also rolled out a new structured plan for issuing common stock. They call it the market Net Asset Value, or mNAV, framework. This approach means Strategy will issue shares only when its stock price is higher than the per-share value of its Bitcoin holdings and operating assets. The idea is simple: protect shareholders from dilution. It also allows Strategy to raise capital when market conditions are good. It’s a smart way to manage growth.
The mNAV Framework and Future Outlook
Cantor Fitzgerald analysts believe Strategy’s massive Bitcoin position is unlikely to ever be matched. They see the company as a pioneer in capital raising. It’s hard to argue with that. Who else has built such a large treasury around a digital asset?
Cantor Fitzgerald analysts wrote, “We are most confident in MSTR maintaining/expanding its current mNAV (1.8x) amongst the broader Bitcoin treasury peer group.” They kept an “overweight” rating. They also raised the price target from $680 to $697. That’s a vote of confidence.
TD Cowen analysts agree. When a public treasury company consistently increases its Bitcoin holdings per share over many years, a substantial premium to its Net Asset Value is logical. Strategy fits this description perfectly. TD Cowen expects the shares to continue trading well. Institutional investors are starting to grasp this concept. It seems fairly basic once you look at it.
Strategy’s market cap currently sits at $112 billion. Shares traded down 5.5% to $379.68 on Friday. This slight dip doesn’t seem to faze the analysts. They see a long game unfolding. It’s a bold play, building a corporate treasury around a volatile asset like Bitcoin. But Strategy seems to be finding its stride. They are certainly showing the world a new way to think about corporate finance.