Benchmark Equity Research has reiterated its Buy rating on Strategy (MSTR), maintaining a $570 price target, which represents approximately 406% upside from Friday's closing price of $112.53. The reaffirmation underscores the investment bank's confidence in the company's long-term value proposition, despite recent turbulence in its preferred equity instrument.
STRC Perpetual Preferred Stock Under Pressure
The sell-off in Strategy's perpetual preferred stock, ticker STRC, saw prices fall to around $83, sparking concerns among some market participants about a potential "de-pegging" event reminiscent of the Terra/Luna collapse. However, Benchmark analyst Mark Palmer pushed back against such comparisons. Palmer emphasized that STRC is not a stablecoin and lacks the reflexivity mechanism that led to Terra's downfall. Instead, it is a genuine perpetual preferred stock backed by Strategy's massive Bitcoin holdings—over 847,000 BTC, valued at approximately $55 billion.
Benchmark Views Sell-Off as a Yield Reset, Not Structural Deterioration
According to Palmer, the decline in STRC is not a sign of structural weakness but rather a market-driven reset of required yields. Strategy holds roughly $1.4 billion in cash reserves, providing ample flexibility to support dividend payments. Benchmark interprets the sell-off as a stress test for Strategy's financing model—a test it believes the company is passing. The report concludes that the underlying Bitcoin collateral and the company's cash position make the perpetual preferred structure sound over the long term.