Strategy (MSTR) stock jumps as analysts back new capital plan

Strategy MSTR shares (previously known as Microstrategy) climbed 7% on Thursday, extending gains that began earlier this week.

The gains came after the company unveiled a new financial framework centered on stock buybacks, strategic Bitcoin sales, and active capital management.

The software company, which has transformed into one of the largest corporate holders of Bitcoin, has been recovering from recent weakness after its shares surged nearly 13% on Monday following the announcement.

Despite the rebound, the stock remains well below its April 2025 highs.

Citi maintains Buy despite lower price target

Citi Research reiterated its Buy rating on Strategy while lowering its price target to $136 from $260.

Analyst Peter Christiansen said the revised target reflects both the company's updated capital management strategy and Citi's revised 12-month outlook for Bitcoin prices.

Earlier this week, Christiansen said the new framework effectively "buys more time" for the company until Bitcoin's price stabilizes.

Under the updated strategy, Strategy plans to strengthen its cash reserves to support preferred dividend payments while using Bitcoin sales to finance share repurchases.

According to Christiansen, achieving the new $136 price target depends on a higher Bitcoin price over the next year as well as an expansion in Strategy's market-to-net asset value premium.

The analyst also noted that the outlook assumes the company's preferred stock offerings recover to near their par values following an expected $1 billion in share repurchases.

Preferred stock remains in focus

Investor attention has increasingly centered on Strategy's Stretch preferred stock, which trades under the ticker STRC.

For roughly the past year, STRC has been the company's primary vehicle for raising capital to fund additional Bitcoin purchases.

The preferred shares recently fell to a record low, dropping well below their $100 par value.

Because Strategy can more easily issue new preferred shares when the stock trades at or above par, the decline has reduced the effectiveness of that financing strategy.

The pressure on STRC comes as Strategy works to demonstrate its ability to fund dividend payments despite generating limited revenue from its legacy software business while holding a balance sheet dominated by Bitcoin.

Insider buying follows strategic shift

Recent insider purchases have also attracted investor attention.

Chief Executive Officer Phong Le's revocable trust made its first purchase of Stretch preferred shares on June 22, acquiring 11,000 shares at an average price of $90.80 per share, for a total investment of $998,800.

Le also directly owns 126,323 shares of Strategy common stock along with several classes of preferred shares and indirectly holds Stretch preferred stock through his children.

Executive Vice President and General Counsel Thomas Chow also purchased preferred shares on June 16, buying 100 STRC shares at $92.71 each and 11 shares of STRK preferred stock at $66.10 per share.

On Monday, Le said the company was moving from "one-way capital issuance to active capital management," signaling a broader evolution in Strategy's financial approach beyond its role as a Bitcoin treasury company.