Clear Street raised its price target for Strategy Inc to $211 from $201 and kept a Buy rating, TheFly and Investing.com reported, focusing attention on how the company finances Bitcoin (BTC) purchases.
TheFly reported that Clear Street viewed Strategy’s third-quarter common-stock sales as supporting preferred-share repurchases and its dollar reserves. Benzinga also reported the brokerage’s concern that issuing new common shares diluted existing investors’ ownership as Strategy added BTC during the quarter.
TheFly said Clear Street viewed Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) as trading near its stated amount, potentially making another preferred-stock sale more feasible. Strategy’s prospectus sets that amount at $100 per share. The potential for further issuance is the brokerage’s reported assessment.
Strategy’s Oct. 19 filing details how it financed its latest purchase. During Oct. 12-18, the company sold 140,872 common shares for $22 million in net proceeds. It combined that money with $100,000 from USD Cash to buy 267 BTC for $22.1 million, an average of $82,900 per BTC.
The company separately used $193.1 million from USD Cash to repurchase 1,938,780 STRC shares. As of Oct. 18, Strategy held 848,517 BTC and reported a $4.83 billion USD Reserve and $447.3 million in USD Cash. Strategy says the reserve is intended to cover preferred dividends and debt interest; USD Cash is available for broader treasury purposes.
Strategy’s filing puts the total acquisition cost of its BTC holdings at $64.02 billion, or an average of $75,446 per BTC.
Holders of Strategy’s Class A and Class B common stock as of Sept. 25 are eligible to vote at a special meeting Oct. 28 at 10 a.m. ET. The proposal concerns daily dividends on four preferred stocks, including STRC. Preferred shareholders cannot vote on the proposal solely by virtue of their preferred shares.
Strategy plans to release third-quarter results after U.S. markets close Oct. 29 and hold a webinar at 5 p.m. ET.
