TD Cowen Grows Bearish on $60 Billion Bitcoin Giant Strategy—Here's Why

Core Viewpoint - TD Cowen analysts have lowered their price target for Strategy shares to $500 from $535, citing stock price volatility and shareholder dilution as key factors [1] Group 1: Financial Performance and Stock Analysis - Strategy's shares are currently trading around $188, reflecting a 24% decline over the past month [1] - The company raised $1.44 billion to maintain a cash reserve, which will be used for dividend payments on preferred shares, as traditional funding sources become constrained [2] - Strategy has issued $7.7 billion in preferred shares this year, indicating a shift from its historical practice of issuing common shares to grow its Bitcoin holdings [3] - The lowered stock price has resulted in more dilution than previously forecasted, leading to a reduction in the earnings multiple from 9x to 5x [5] - Year-to-date, Strategy's stock price has decreased by approximately 35%, while Bitcoin's price has fallen by 2.5% to just above $92,000 [7] Group 2: Market Sentiment and Future Outlook - Analysts believe that shoring up liquidity during stressful times is prudent, enhancing the company's access to capital markets [4] - Despite the stock's decline, Benchmark has raised its 2026 price target for Strategy to $705, viewing it as a powerful asymmetric vehicle in global markets due to its capital-raising capabilities and potential benefits from Bitcoin's upside [6]