Strategy’s $2.1B bitcoin bet shows why it doesn’t need a premium to win

Strategy’s stock (MSTR) doesn’t need to trade at a bitcoin BTC$89,109.82 premium to be a winning bet, according to TD Cowen analyst Lance Vitanza, who maintained a $440 price target.

In a new research note, Vitanza reaffirmed his “Buy” rating on the stock and kept the $440 price target — nearly triple Tuesday’s closing price of $160.23. The case, he said, rests on Strategy’s ability to steadily grow its bitcoin holdings per share, even when sentiment is low and the stock isn’t trading at a premium to its net asset value.

“Strategy remains attractive for those looking to create bitcoin exposure, we believe,” Vitanza wrote, pointing to the company’s history of navigating market downturns by increasing asset coverage through preferred equity.

The company recently issued more than $2.1 billion worth of common and preferred stock over an eight-day period ending January 19. It used those proceeds, plus some additional capital, to purchase 22,305 BTC, its largest weekly acquisition since November 2024.

The move, Vitanza argued, demonstrates how the company’s financial structure gives it a long-term edge. By issuing variable and convertible preferred stock at or near parity, Strategy adds leverage without traditional debt. This lets it acquire more bitcoin without significantly diluting shareholders.

Investors willing to dig into the capital structure might also find value in the firm’s preferred shares. Vitanza highlighted the STRF class, which yields about 9.6% annually. TD Cowen expects that to compress to 7.9% as the shares appreciate, implying a potential 20% price gain. With a fixed 10% dividend, the one-year return could reach 30%, the note said.

Strategy now holds 709,715 BTC, far outpacing any other public company. The firm’s equity-driven approach, Vitanza says, positions it to keep accumulating while bitcoin prices remain under pressure, offering investors leveraged upside to a potential recovery.