Analysts support Saylor’s strategy as a return of the MSTR and STRC phase

The ruling has begun responding to Strategy’s June 29 announcement of its five-part capital management framework, with Benchmark Equity Research doubling its Buy rating on MSTR stock, along with a $570 price outlook.

As of writing, MSTR stock was trading at $92.68, up about 13% from $82.31 when markets closed on June 29. Price target This indicates that Benchmark sees the leading Bitcoin treasury company’s common shares rallying at 500%+.

The rally also extended to STRC’s preferred stock, as it also followed MSTR into gaining more than 12% since markets closed yesterday.

Saylor was also in a bullish mood early this morning. Posting on X“Stronger Credit. Stronger Equity. More Bitcoin,” with strategic stocks back in the green.

Are analysts optimistic about the strategy now?

The impetus for the bullish call came after the strategy unveiled its “Digital Credit Capital Framework” in an SEC filing. like Reported by CryptopolitanThis package included an increase in STRC’s dividend payments to 12%, a discretionary $2 billion stock buyback program and board-level approval to sell up to $1.25 billion in bitcoins from the company’s treasury of 847,363 bitcoins.

However, not everyone is like that Bull riding With Benchmark and Saylor.

In response to the Bitcoin sell-off that Strategy added to its SEC filing, CryptoQuant’s head of research, Julio Moreno, warned that selling Bitcoin or common stock to defend the STRC could be no different from opening the proverbial Pandora’s box.

Moreno predicted that any price level the strategy chooses to initiate intervention will default to the line that traders choose as the breakout point for the company.

“The moment the market knows what price level the strategy is trying to defend, it becomes a target,” Moreno said. He continued by hinting that the strategy could be overwhelmed by selling pressure at this level.

Moreno was the same CryptoQuant analyst who recommended Strategy stop buying Bitcoin and focus on rebuilding its cash reserves in previous Cryptopolitan reports.

CryptoQuant’s warning came as the strategy faces nearly $2.8 billion in earnings bills over the next two years. The company’s breathing room quickly disappeared, with coverage compressed from more than seven years to about 14 months during a six-month period when annual preferred dividend costs rose from $300 million to $1.2 billion.

The strategy is no longer tied to its Bitcoin purchases

Benchmark analyst Mark Palmer described Strategy’s capital framework as formal permission to put its capital machine in “reverse gear” during periods of market stress. So, instead of charging upfront fees on Bitcoin purchases no matter the circumstances, the company can now buy back common and preferred shares, convert its Bitcoin into cash to meet obligations, and take a break from issuing new common shares when shares fall below a reasonable level of net asset value.

“The strategy is now an active manager of both sides of the capital structure, an approach we view as a major positive for its shareholders,” Ballmer wrote in a client note.

Ballmer argued that the $1.25 billion Bitcoin sale authorization amounted to a “rounding error” against the company’s balance of 847,363 Bitcoin. The strategy previously sold just 32 bitcoins in May, a transaction worth about $2.5 million to fund a preferred dividend. Cryptopolitan reported that this sale violates CEO Michael Saylor’s long-standing pledge to never sell.

How do markets react to the new-look strategy?

The market reaction on Monday was quick. MSTR stock rose 12.6% to $92.68, while STRC stock jumped nearly 10% to about $83.67, recovering a large portion of its June losses, Google Finance data showed.

Cryptopolitan reported that CEO Phuong Le framed the shift as a move from pure capital issuance to actively managing the capital structure through issuance and buybacks.

Whether the framework works for Bitcoin’s recovery depends on the cost of the strategy and whether the company exercises its new tools, or keeps them as options that reassure the market without using them.

Investors will be watching quarterly disclosures on bitcoin sales, reserve balances, and buyback activity in upcoming filings for signs of where the strategy is headed from here.