Monness Analyst Issues Sell Rating on MSTR, Citing Challenges in Bitcoin Buying Strategy
Michael Saylor’s Bitcoin acquisition strategy, which has driven Strategy (MSTR) shares to a staggering 2,500% rise over the last five years, is nearing its limits, according to an analyst from Monness, Crespi, Hardt & Co.
In a recent note, analyst Gus Gala downgraded MSTR to a “sell” after previously initiating a “neutral” rating just two weeks ago. Gala expressed concerns that the company’s strategy of buying Bitcoin through common share issuances may soon hit a wall. Strategy currently holds 528,185 BTC, with ongoing purchases funded primarily through share issuance and its preferred stock series STRK.
While the company has raised significant capital through these methods, Gala highlighted that Strategy has already tapped into nearly all of its $21 billion common share offering, raising $18.6 billion so far. He warned that continued reliance on share issuance for Bitcoin purchases would become increasingly unsustainable, and that a shift toward fixed-income securities may be required to maintain the strategy.
Gala set a price target of $220 for MSTR, which suggests nearly 30% downside from the stock’s current price in the $300 range.
