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Investing.com - Monness, Crespi, Hardt upgraded Strategy (NASDAQ:MSTR) from Sell to Neutral on Monday, citing a reduced premium to its Bitcoin holdings and diminished downside pressure. The stock currently trades at $241.93, with a market capitalization of $69.52 billion, after experiencing significant volatility with a 8.59% decline over the past week.
The research firm removed its price target while maintaining its existing estimates. Monness noted that Strategy’s market capitalization premium to its Bitcoin holdings has decreased significantly to 1.24x/1.1x from 2.1x/1.9x when it initiated its Sell rating. According to InvestingPro data, analysts maintain a consensus "Buy" recommendation with price targets ranging from $200 to $705, while the platform’s Fair Value assessment suggests the stock is slightly undervalued.
Two key catalysts drove the rating change: the end of convertible arbitrage volatility with remaining convertible notes expected to be equitized, and the company’s recent B- credit rating from S&P 500, which eliminated prospects of marketing to investment grade investors.
The firm acknowledged Strategy’s operational arbitrage through regulatory mechanisms including preferred share schemes and at-the-market offerings, along with potential for international expansion.
Monness continues to question the fundamental purpose of Bitcoin Treasury companies that trade at premiums to net asset value, especially without native yield, but conceded that at a meaningful discount and with a view toward the underlying asset price, there could be justification for holding shares coming out of crypto market downturns. InvestingPro identifies several additional insights about MSTR, including expectations for net income growth this year and strong long-term returns. Access the comprehensive Pro Research Report covering MSTR and 1,400+ other US equities for deeper analysis and actionable intelligence.
In other recent news, Strategy Inc announced the pricing of its initial public offering of 7,750,000 shares of 10.00% Series A Perpetual Stream Preferred Stock at €80.00 per share. The company expects to raise approximately €620.0 million, or $715.1 million, in gross proceeds, with net proceeds estimated at €608.8 million, or $702.2 million, after deductions. Additionally, Strategy Inc has consolidated its existing at-the-market offering programs into a single Omnibus Sales Agreement with several sales agents, including TD Securities and Barclays Capital. This agreement allows the company to issue and sell a range of securities, including its Series A Preferred Stock and Class A common stock.
Moreover, Strategy Inc reported that it sold 76,017 shares of its 10.00% Series A Perpetual Strife Preferred Stock between October 27 and November 2, generating net proceeds of $8.4 million. The company also plans to conduct an initial public offering of 3.5 million shares of its 10.00% Series A Perpetual Stream Preferred Stock, with proceeds intended for general corporate purposes, including bitcoin acquisition. As of November 2, $1.66 billion of the Series A Perpetual Strife Preferred Stock remained available for issuance. These developments reflect Strategy Inc’s ongoing efforts to manage its financial strategies and capital allocation effectively.
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