Risk to Bitcoin Buying Plans Makes Strategy a Sell, Says Wall Street Analyst

Although Strategy’s (MSTR) assertive buying of bitcoin (BTC) has sent its shares soaring implicit 2,500% implicit the past 5 years, 1 expert argues that the reverse could soon beryllium the case.

“While we were antagonistic connected respective respects upon initiation, we person gained incremental assurance that the convertible issuance strategy is apt tapped,” wrote Monness Crespi expert Gus Gala, downgrading MSTR to merchantability conscionable 2 weeks aft initiating sum astatine neutral.

Strategy presently holds 528,185 BTC connected its equilibrium expanse and has been buying sizable quantities astir each week for the past fewer months, mostly funded by communal stock issuance and besides income of its archetypal preferred bid STRK.

Gala's terms people of $220 suggests conscionable shy of 30% downside from the existent terms successful the $300 area.

Gala argued that it volition go progressively much hard for MSTR to rise wealth to bargain bitcoin via stock issuance, forcing the institution to displacement towards fixed income vehicles.

“If fixed income securities bash not go a greater information of issuance, the BTC treasury strategy volition look progressively challenged.”

Gala noted that MSTR has already utilized $18.6 cardinal of its $21 cardinal communal stock at-the-market offering. The institution besides raised different $711 cardinal past week via STRF, its 2nd bid of preferred stock.