Monness Crespi Downgrades Strategy (MSTR) Amid Concerns Over Bitcoin Buying Strategy’s Sustainability

Michael Saylor’s Strategy (MSTR) has seen remarkable stock growth—rising by over 2,500% in the past five years—thanks to its bold Bitcoin (BTC) purchasing strategy. However, analysts at Monness, Crespi, Hardt & Co. believe that this growth could soon face significant hurdles.

In a recent report, analyst Gus Gala downgraded MSTR to a “sell” rating, just two weeks after initiating coverage with a neutral outlook. Gala cited concerns about the company’s ability to continue raising funds through common share issuance, which has been a key source of capital for Strategy’s Bitcoin acquisitions.

Strategy currently holds a substantial 528,185 BTC on its balance sheet and has been buying Bitcoin consistently in recent months, funded largely through share issuance and sales of its preferred stock series, STRK. However, Gala warned that these capital-raising methods are reaching their limits and could face increasing difficulty in the near future.

Gala set a price target of $220 for MSTR, reflecting a potential downside of nearly 30% from the stock’s current price in the $300 range. He emphasized that without greater reliance on fixed-income securities, the company’s Bitcoin strategy will face more challenges.

To date, Strategy has used $18.6 billion of its $21 billion common share offering, and just last week, it raised an additional $711 million through its second preferred stock series (STRF).