TD Cowen has decided to lower its price target for Strategy after analyzing recent market volatility and its financial effects. The firm’s analysts cite incremental shareholder dilution as a key factor negatively affecting the current stock price. According to the official report from TD Cowen, shoring up liquidity during times of financial stress is always a prudent measure for stakeholders.
The investment bank adjusted its estimate for the company’s shares to $500, down from the previous projection of $535. Currently, the shares are trading around $188, representing a significant drop of 24% over the last month. The company recently signaled that it raised $1.44 billion to maintain a vital cash reserve.
These funds are primarily intended for dividend payments on the preferred shares that the entity has issued throughout this year. Strategy has issued $7.7 billion in preferred shares, as its traditional funding method has recently become less effective. The firm seeks to avoid selling its Bitcoin holdings, although it admitted it would do so if strictly necessary.
Financial challenges amid shareholder dilution and market volatility
TD Cowen analysts indicated that their adjusted model reflects the dilutive impact of raising cash to fund these corporate dividends. Strategy’s market value is currently hovering close to its lowest point recorded in the past 13 months. Furthermore, the heightened volatility warrants a lower earnings multiple, which was drastically reduced from 9x to 5x.
On the other hand, not all market experts share this bearish view on the company’s immediate future. Investment bank Benchmark raised its 2026 price target to $705, highlighting the asymmetric potential of the global investment vehicle. Mark Palmer argued that the company’s unique ability to raise capital remains a powerful tool.
Despite divided opinions, the year-to-date performance shows a worrying trend for the firm’s traditional investors. So far this year, the value of the shares has fallen approximately 35% in global markets. The price of Bitcoin has edged down slightly by 2.5%, sitting just above $92,000 according to recent data.
Is Strategy too big to fail after accumulating 650,000 Bitcoin?
The current situation has sparked renewed fears about a potential collapse of the corporate giant’s Bitcoin treasury. Michael Saylor acknowledged that the firm might have to sell Bitcoin for the first time, which has generated uncertainty in the sector. Some large compañÃas (companies) have imploded in the past, suggesting that size does not guarantee total safety.
The leverage strategy embedded in the company means its premium over Bitcoin can shift quickly alongside the digital asset. Market observers note that the entity holds 3.1% of the leading cryptocurrency’s total supply. Therefore, investors must watch how the company manages its leverage and reserves in the coming months.
