Wall Street analysts covering Strategy (MSTR) broadly agree on one point after the company’s fourth-quarter earnings on Thursday: the headline losses look dramatic, but they do not signal a liquidity crisis or forced bitcoin selling.
Strategy reported a $17.4 billion operating loss and a $12.6 billion net loss for the quarter, figures driven largely by non-cash mark-to-market accounting tied to bitcoin’s price decline. Both TD Cowen and Benchmark said the market reaction missed that context, sending shares down about 17% on a day when bitcoin and other risk assets were already under pressure.
Shares are higher by 21% on Friday as bitcoin climbs from yesterday’s low of $60,000 to back above $70,000.
The two analysts agree the core debate centers on solvency, not profitability. Strategy holds 713,502 bitcoin, worth nearly $50 billion at current prices, against about $8.2 billion in convertible debt. Benchmark analyst Mark Palmer said the company would only face true balance-sheet stress if bitcoin fell below $8,000 and stayed there for years. Management emphasized on the earnings call that none of its debt carries covenants or triggers tied to bitcoin’s price or its average purchase cost.
TD Cowen’s Lance Vitanza also focused on the durability of the capital structure. He argued that Strategy was built to amplify bitcoin’s volatility by design, with common equity trading at roughly 1.5 times bitcoin’s swings. That leverage cuts both ways. Vitanza said the company’s $2.25 billion cash reserve and staggered debt maturities mean there is no reasonable scenario where Strategy would be forced to sell bitcoin in the near term, even if prices remain depressed.
Where analysts differ is less about risk and more about framing. TD Cowen leaned into Strategy’s role as a “digital credit engine,” highlighting its growing preferred equity business and the liquidity of its STRC preferred stock, which pays an 11.25% annualized dividend. Benchmark placed more weight on bitcoin’s long-term price path and the optionality embedded in Strategy’s equity if bitcoin rallies.
Both firms remain constructive on the stock. Benchmark reiterated a Buy rating with a $705 price target, based on a sum-of-the-parts model that assumes bitcoin reaches $225,000 by the end of 2026. TD Cowen also maintained a Buy rating, arguing that Strategy remains one of the most efficient ways for investors to gain leveraged bitcoin exposure outside of ETFs, though it did not disclose a specific price target in its note.