TD Cowen: Strategy is increasing its cash reserves, potentially preparing for a "long-term crypto winter".
Odaily Planet Daily reports that Bitcoin reserve company Strategy (MSTR) announced on Monday that it raised approximately $748 million through a common stock offering, increasing its dollar cash reserves to $2.19 billion. Investment bank TD Cowen (TD Securities) noted that this move significantly enhances the company's liquidity and financial flexibility, enabling it to continue operating during a "long-term crypto winter."
TD Securities analysts stated in a report that the increased cash reserves are sufficient to cover Strategy's interest and dividend payments for approximately 32 months, helping the company navigate a challenging market environment. "Strengthening liquidity during stressful times is always a prudent move, and this action also alleviates market concerns about the company's ability to continue operating."
The agency reiterated its "buy" rating on Strategy and maintained its 12-month price target of $500. As of this writing, Strategy's stock price is around $165, down more than 43% year-to-date. Analysts point out that considering Strategy's embedded leverage on Bitcoin prices and the high volatility of Bitcoin prices and premiums, its price target remains reasonable over a one-year period.
