Although the aggressive purchase of Bitcoin (BTC) of Strategy (MSTR) has sent its shares to more than 2,500% in the last five years, an analyst argues that the opposite could soon be the case.
“While we were negative in several aspects at the beginning, we have gained an incremental trust that the convertible broadcast strategy probably takes advantage of,” wrote Crespi Gus gala, degrading Mstr to sell only two weeks after starting the coverage in neutral.
The strategy currently has 528,185 BTC in its balance sheet and has been buying considerable amounts almost every week during the last months, mainly funded by the issuance of common shares and also sales of its initial preferred series Strk.
The target gala price of $ 220 suggests only 30% of the decline of the current price in the $ 300 area.
Gala argued that it will be increasingly difficult for MSTR to raise money to buy Bitcoin through the issuance of shares, which forces the company to change towards fixed income vehicles.
“If fixed income values do not become a majority of the issuance, BTC’s treasure strategy will be increasingly challenged.”
Gala said Mstr has already used $ 18.6 billion of its offer of common shares of $ 21 billion in the market. The company also raised another $ 711 million last week through Strf, its second series of preferred shares.
