Wall Street analysts covering Strategy (MSTR) broadly agree on one point following the company’s fourth-quarter earnings on Thursday: The headline losses look dramatic, but they do not indicate a liquidity crisis or a forced sell-off of bitcoin.
Strategy reported an operating loss of $17.4 billion and a net loss of $12.6 billion for the quarter, figures largely driven by non-cash mark-to-market accounting linked to bitcoin. price drop. Both TD Cowen and Benchmark said the market reaction overlooked that context, sending stocks down about 17% on a day when bitcoin and other risk assets were already under pressure.
Shares rose 21% on Friday as bitcoin rises from yesterday’s low of $60,000 to surpass $70,000.
The two analysts agree that the central debate focuses on solvency, not profitability. Strategy owns 713,502 bitcoins, worth almost $50 billion at current prices, against about $8.2 billion in convertible debt. Leading analyst Mark Palmer said the company would only face real stress on its balance sheet if bitcoin fell below $8,000 and stayed there for years. Management emphasized in the earnings call that none of its debt carries covenants or triggers tied to the price of bitcoin or its average purchase cost.
TD Cowen’s Lance Vitanza also focused on the durability of the capital structure. He argued that the strategy was created to amplify bitcoin’s volatility by design, with common shares trading at about 1.5 times bitcoin’s swings. That influence has effects in both directions. Vitanza said the company’s $2.25 billion cash reserve and staggered debt maturities mean there is no reasonable scenario in which Strategy would be forced to sell bitcoin any time soon, even if prices remain depressed.
Where analysts differ is less on the risk and more on the framework. TD Cowen built on Strategy’s role as a “digital credit engine,” highlighting its growing preferred stock business and the liquidity of its STRC preferred stock, which pays an 11.25% annualized dividend. The benchmark gave more weight to bitcoin’s long-term price trajectory and the optionality built into the strategy’s capital if bitcoin recovers.
Both companies remain bullish on the stock. Benchmark reiterated a Buy rating with a price target of $705, based on a sum-of-parts model that assumes bitcoin reaches $225,000 by the end of 2026. TD Cowen also maintained a Buy rating, arguing that the strategy remains one of the most efficient ways for investors to gain leveraged exposure to bitcoin outside of ETFs, although it did not disclose a specific price target in its note.
