TD Cowen Cuts Strategy (MSTR) Stock Price Target to $260 Amid Bearish Bitcoin Outlook
TD Cowen has cut its price target for Strategy (MSTR) stock from $400 to $260, while maintaining a Buy rating, according to a report. The revision is driven by a more conservative long-term Bitcoin price outlook, not concerns over the company’s new financial strategy.
Strategy’s stock closed Monday with a gain of over 12% after it unveiled a framework to monetize part of its Bitcoin treasury and strengthen its balance sheet. However, the enthusiasm faded as TD Cowen lowered its target. The firm noted that the reduced target still implies a substantial 200% upside from current levels, indicating continued long-term confidence in Strategy.
Strategy recently announced a Digital Credit Capital Framework, allowing it to generate up to $1.25 billion through Bitcoin sales. The proceeds will be used for its US dollar reserve, dividend payments, interest obligations, cash reserves, and share repurchases. The company also paused further Bitcoin acquisitions while selling about $1.15 billion worth of MSTR shares as part of a capital management strategy.
The Bitcoin sale plan has drawn criticism from market experts and Ripple CEO Brad Garlinghouse, who blamed Michael Saylor’s Strategy for the current crypto market downturn. Critics argue that selling Bitcoin could weaken market sentiment and contribute to price pressure. However, a Grayscale executive suggested that a $3 billion Bitcoin sale by Strategy could ultimately strengthen investor confidence in both MSTR stock and STRC.