StoneX and TD Cowen: Strategy’s Preferred-Stock Funding May Support More Bitcoin Purchases

Strategy’s preferred-stock funding structure and liquidity have stabilized, potentially creating conditions for the company to resume Bitcoin purchases and increase its Bitcoin holdings per share. According to Odaily, analysts at StoneX and TD Cowen maintained buy ratings on Strategy, with price targets of $435 and $260, respectively. At the end of the third quarter, Strategy held $5.07 billion in dollar-denominated assets, including $4.83 billion in cash, enough to cover about 3.2 to 3.4 years of preferred-stock dividends and debt interest. The company spent about $2 billion repurchasing STRC preferred shares, helping their price recover to near the $100 par value. Strategy’s Bitcoin holdings per share have nevertheless fallen 3.7% this year, as funds went toward cash reserves and preferred shares rather than additional Bitcoin. Holders of STRC, STRF, STRK, and STRD preferred shares approved daily dividend accruals, effective November 1 for STRC and January 1 next year for the other three classes. Management said the change is intended to reduce volatility, improve liquidity, and broaden demand. TD Cowen said broader distribution channels and improved liquidity could eventually make it more efficient for Strategy to issue “digital credit” products.