Strategy Falls 15% in a Month: Hold or Fold the MSTR Stock?

Core Insights - Strategy (MSTR) shares have declined 14.7% in the past month, underperforming the Zacks Computer-Software industry and the broader Computer and Technology sector [1] Company Overview - Strategy is the world's largest bitcoin treasury company, holding 628,791 bitcoins as of July 29, which accounts for 3% of all bitcoin in existence [2] - Other notable companies holding bitcoins include MARA Holdings (49,951 bitcoins), Riot Platform (19,273 bitcoins), and Tesla (11,509 bitcoins) [2] Stock Performance - MSTR shares have underperformed compared to MARA Holdings, Riot Platform, and Tesla over the past month, with Tesla increasing by 2.1%, while MARA and Riot shares dropped by 14.5% and 12.3%, respectively [3] Bitcoin Holdings and Projections - Strategy expects to achieve a bitcoin yield of 30% and $20 billion in gains if the bitcoin price reaches $150,000 by the end of the year [8] - The company projects a net income of $24 billion in 2025 based on the same bitcoin price outlook, which is significantly better than the projected losses of MARA Holdings and Riot Platforms [10] Capital Raising Strategy - The company has adopted a disciplined approach to capital raising through preferred equity offerings, which include various instruments with attractive yields [11] - Year to date, Strategy has issued $10.7 billion in equities and $7.6 billion in fixed income securities [12] Earnings Estimates - For the third quarter of 2025, the Zacks Consensus Estimate for MSTR's loss remains unchanged at 11 cents per share, compared to a loss of $1.56 in the same quarter last year [13] Valuation Concerns - MSTR shares are considered overvalued, with a Price/Book ratio of 2.15X compared to MARA Holdings' 1.24X and Riot Platforms' 1.38X, indicating a premium valuation [14] - The stock is currently trading below the 50-day moving average, suggesting a bearish trend [19]