TD Cowen has raised its long-term Bitcoin forecasts while keeping a $260 price target and Buy rating on Strategy, arguing that the company’s common shareholders face a more complicated path to gains than Bitcoin’s price alone would suggest. The bank said debt, preferred shares and cash obligations dilute the amount of Bitcoin value attributable to each MSTR share, even as Strategy’s treasury remains one of the largest corporate Bitcoin positions in the market.
Strategy shares fell about 2.5% to $150 on Thursday and were down nearly 5% year to date. At that price, TD Cowen’s $260 target represents roughly 73% potential upside. The stock had recovered from late June through mid-August after spending much of the earlier period struggling to establish a sustained move above $100.
TD Cowen analysts Lance Vitanza and Jonnathan Navarrete lifted their Bitcoin assumptions to about $109,000 by the end of 2026 and $280,000 by 2029. Bitcoin traded near $81,300 on Thursday, down roughly 9% so far this year despite a recent rebound. A separate market forecast cited in the report put a fourth-quarter base case between $80,000 and $90,000, placing the current price close to the upper end of that range.
Preferred claims reduce Bitcoin exposure per common share
The central concern in TD Cowen’s valuation is the growing stack of financial claims that rank ahead of Strategy’s common equity. Those claims include the company’s debt and preferred stock series, including STRC, STRF and STRD.
Preferred shares generally receive specified dividends and have priority over common stock in distributions. Debt holders also stand ahead of common shareholders if a company must repay creditors or liquidate assets. In Strategy’s case, those layers mean the company’s Bitcoin holdings cannot be viewed as belonging entirely to MSTR shareholders on a one-for-one basis.
After accounting for debt and preferred securities, TD Cowen said Bitcoin ownership per MSTR share has been “less robust.” The wording captures the tension in Strategy’s model: the company can expand its Bitcoin balance sheet, but the financing used to do so may also expand senior claims on the company’s assets.
That calculation matters more as Strategy relies on several types of capital rather than common-stock issuance alone. A rising Bitcoin price can lift the value of the treasury, yet part of that increase supports obligations to lenders and preferred shareholders before it reaches the common-equity layer.
Cash reserves compete with Bitcoin purchases
TD Cowen also said some newly raised capital is being allocated to cash reserves and support for preferred-share obligations rather than being deployed immediately into Bitcoin. This approach gives Strategy additional liquidity to manage dividends and other financial commitments, but it also reduces the amount of capital available for near-term Bitcoin accumulation.
For a company whose equity has often traded as a leveraged proxy for Bitcoin, the distinction is material. Strategy’s common shareholders are exposed to Bitcoin’s upside, but they also bear the cost of maintaining the capital structure that enables the company to hold and finance such a large position.
The company’s shares had previously commanded a considerably higher valuation relative to the net value of their underlying assets. According to Saylor Tracker, Strategy’s market valuation has recovered to about 1.0 times net asset value after falling to 0.63 in June. A ratio near 1.0 means the market is valuing the company at roughly the estimated value of its assets after liabilities, rather than assigning the large premium that has periodically accompanied enthusiasm for its Bitcoin strategy.
Saylor Tracker puts Strategy’s Bitcoin holdings at 848,000 BTC, with about $4.5 billion in unrealized gains. The size of that treasury gives the company substantial sensitivity to Bitcoin’s price movements, though the preferred and debt structure affects how much of that sensitivity flows through to common shares.
European share offering adds another funding channel
Vitanza and Navarrete also pointed to Strategy’s new stock class offered at €80 per share, describing the European financing route as a way for the company to raise capital outside its domestic issuance channels. The proceeds were associated with the purchase of another 6,720 Bitcoin, according to the information cited in the report.
The structure adds to Strategy’s menu of financing options as it seeks to preserve its ability to buy Bitcoin while meeting obligations linked to preferred securities. Preferred instruments can appeal to buyers seeking defined payments and greater seniority than common equity, particularly during sharp market declines. Their presence may make it easier for Strategy to attract capital, but the trade-off is a more complex balance sheet for MSTR shareholders.
Strategy’s equity therefore remains tied to two separate calculations: the direction of Bitcoin and the company’s ability to increase Bitcoin exposure per common share after financing costs. TD Cowen’s maintained Buy rating indicates the analysts still see room for the stock to rise under their Bitcoin assumptions. Their unchanged $260 target also signals that a bullish Bitcoin forecast does not automatically translate into proportional gains for common shareholders.
Bitcoin’s near-term trading range remains relevant to that equation. The asset was hovering around $81,300, while the report cited a fourth-quarter base case topping out near $90,000. A move through the low-$82,000 area could strengthen the recent recovery, while a retreat toward the $74,000 to $78,000 range would test demand for both Bitcoin and Bitcoin-linked equities.
For Strategy, the next phase will be shaped as much by financing discipline as by the price of Bitcoin. The company has built a treasury large enough to benefit meaningfully from a sustained rise in the asset, but each new preferred issue, cash commitment or debt obligation determines how much of that benefit ultimately reaches holders of its common stock.
Concerned about Strategy’s Bitcoin exposure and upside? Deepen your market insight with our latest analysis on Bitcoin’s price trajectory.
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