Cantor Fitzgerald’s Brett Knoblauch has sharply reduced his outlook on Strategy (MSTR), slashing his 12-month price target to $229 from $560 as the company loses its ability to raise capital at a premium to its bitcoin holdings. Even so, he maintains an overweight rating, arguing that the long-term strategy could regain momentum if market conditions improve.
Knoblauch said Strategy’s fully adjusted market net asset value (mNAV) has fallen to 1.18x, still above parity but far below the lofty multiples that once allowed the company to issue equity at attractive valuations. With the premium now eroded, any new common share issuance risks becoming dilutive, undermining Strategy’s long-standing model of raising capital to purchase additional bitcoin.
That model—built on repeated equity, preferred stock, and convertible debt offerings—powered Strategy to massive gains since its initial 2020 bitcoin purchase. But over the past year, shrinking investor appetite for leveraged bitcoin exposure, combined with weak bitcoin price action, has pushed MSTR down roughly 70% from its late-2024 peak.
Reflecting the shift, Knoblauch cut his estimate for Strategy’s annual capital-raising capacity from $22.5 billion to $7.8 billion. His valuation of Strategy’s treasury operations—the potential upside the firm can generate by issuing capital and buying more bitcoin—collapsed from $364 per share to just $74.
Still, Knoblauch says the decline is largely a function of both falling bitcoin prices and reduced valuation multiples rather than a breakdown of the business model itself. He believes the strategy could regain traction if bitcoin recovers and investors once again seek leveraged exposure through MSTR.
A separate report from Mizuho echoed a more constructive near-term outlook. After raising $1.44 billion in new equity, Strategy has built a cash reserve sufficient to cover 21 months of preferred dividends, giving the company room to wait out market volatility without selling bitcoin. Analysts Dan Dolev and Alexander Jenkins said this buffer strengthens the company’s short-term positioning.
At a recent Mizuho event, CFO Andrew Kang outlined a more cautious funding plan. Strategy does not intend to refinance its convertible debt ahead of the first maturity in 2028 and will instead lean on preferred equity to access capital while preserving its bitcoin stack. He added that the company will only resume issuing common stock when mNAV climbs above 1, signaling that investors are again willing to pay a premium for its bitcoin exposure.
If conditions fail to improve, Kang acknowledged that bitcoin sales could be considered but emphasized this would be a last resort.
Analysts note that Strategy appears to be following a similar playbook to 2022, when it paused bitcoin accumulation during a market downturn and resumed buying once conditions stabilized. By conserving liquidity and staying patient, they say, the company may be able to weather the current slump and re-engage its capital flywheel when market sentiment turns.
