Strategy (NASDAQ: MSTR) has drawn market attention following a significant rally in its STRC preferred stock, which closed at $98.64 on September 11—the highest level since June 1 and just $1.36 below its $100 par value.
The STRC shares have gained 38% since June 26, bolstered by Strategy's ongoing buyback program initiated in July. The company has repurchased $811.5 million in STRC shares, including a recent $176 million purchase, funded through sales of MSTR stock and Bitcoin holdings.
Capital-Raising Implications
An analyst cited in market commentary suggested that if STRC reaches or exceeds par value, Strategy could gain access to expanded preferred equity financing capabilities. The analyst noted that Strategy currently maintains an mNAV of 1.11x, and projected that a conservative 1.5x mNAV multiple would value MSTR around $185 based on current net asset value. Canaccord separately increased its MSTR price target from $175 to $179.
Technical and Market Pressures
MSTR stock reached an intraday high of $137 on September 11 before closing at $130, testing resistance at the 200-day moving average of $138. The pullback occurred amid rising expectations for Federal Reserve rate increases, with market data showing 79% odds of a rate hike at the September 16 FOMC meeting following a 0.33% month-over-month core CPI increase reported on September 11.
Other cryptocurrency-related stocks including Coinbase (COIN) and Circle (CRCL) posted modest gains despite broader sector volatility. Chart analysis indicates potential support at the 100-day moving average of $126, with further downside risk at the August 21 low of $117.
Strategy's unrealized profit on Bitcoin holdings has contracted to $1.3 billion following recent Bitcoin weakness.
