Strategy Stock Falls Nearly 10% After Q3 Results, but Analysts Keep Buy Ratings

Strategy shares fell nearly 10% on Friday following the company’s third quarter report, yet Wall Street remains bullish on the largest bitcoin treasury company. Analysts say the firm has strengthened its balance sheet and steadied its preferred stock financing, although that came at the cost of near term growth in bitcoin per share. MSTR traded down 8% at $130.90 on Friday morning and is down about 27% so far this year.

Cash Reserve and STRC Preferred Stock Buyback

Strategy ended the quarter with $5.07 billion in dollar assets, including a $4.83 billion cash reserve. According to StoneX and TD Cowen, that reserve covers roughly 3.2 to 3.4 years of preferred dividends and debt interest. The company also spent about $2 billion buying back its STRC preferred stock, which helped bring the shares close to their $100 par value and showed the strength of its digital credit model. Bitcoin per share, however, is down 3.7% this year as the company put cash reserves and support for its preferred securities ahead of buying more bitcoin.

Daily Dividends Approved for Preferred Shares

Holders of STRC, STRF, STRK and STRD preferred shares approved a change this week that lets dividends accrue daily, starting Nov. 1 for STRC and Jan. 1 for the others. StoneX analyst Mark Palmer said management wants to reduce volatility, improve liquidity, broaden demand and move these instruments toward the tokenized, around the clock market it expects.