Strategy stocks (Nasdaq:MSTR) posted mixed results on December 2. This followed confirmation that the company would sell its Bitcoin holdings if the mNAV (market-to-net-asset-value) fell below 1x.
The stock fell more than 8% to a low of $149 before recovering to close Monday’s session at $171.5.
However, analysts at investment bank and research firm Benchmark raised MSTR’s price target to $705, implying 183% upside potential.
In a note to clients, Benchmark’s equity research analyst Mark Palmer downplayed the MSTR fearsespecially those related to the withdrawal of BTC and the debt obligations of $8.2 billion.
He added:
“In simple terms, the company would not be able to fully cover its ~$8.2 billion in outstanding convertible debt if the price of Bitcoin fell below $12,700 and stayed there.”
That would mean an 86% BTC price crash that would cripple MSTR, but Palmer said such an outcome was highly unlikely.
“Although there have been multiple drops of more than 80% in Bitcoin’s 17-year history, we believe that multiple macro shocks would have to occur simultaneously for such a turnaround to occur at this point.”
In December, only Benchmark made a strong buy for MSTR, despite the MSCI lockout threat and the BTC correction. Thirteen other analysts also gave a ‘moderate buy’ judgement.
Source: Marketbeat
According to Palmer, the stock has a “Bitcoin-linked reflexivity that gives it upside that no other stock can match.”
Impact of Strategy’s $1.44 billion reserve
Strategy also announced one Reserve of $1.44 billion to cover liabilities related to dividends from preferred stock that it uses to raise capital for BTC purchases.
Some hailed the reserve as a cushion for the company to prevent it from selling off its BTC to meet obligations. However, because the reserve itself was another loan, different feared that the entire MSTR ecosystem could soon collapse.
According to critics, such a scenario could drag BTC and the entire crypto market down with it. In fact, Peter Schiff called it is the “end of MSTR.”
Source:
Will Strategy Sell Its BTC Holdings?
CryptoQuant analyst Carmelo Aleman, however, disagreed with Schiff’s doomsday scenarios.
He marked that the current MSTR level was undervalued (with lower MSTR price ranges) relative to BTC reserves, a signal that triggered a recovery in 2022.
Source: CryptoQuant
The market focus will now shift to MSTR mNAV (currently 1.15x) and whether the company sells its 650K BTC.
On the prediction site Polymarket the chances of Strategy’s BTC selloff by mid-2026 rose to over 40% before falling below 30% at the time of writing. In other words: the chance of this happening was small, but not zero.
Source: Polymarkt
Final thoughts
- Despite the market turmoil, Benchmark projects an upside potential of 180% for MSTR stock, and thirteen analysts are bullish on the stock.
- The market started to price the possibility that Strategy could sell BTC in 2026.