Strategy Inc. Stock Slides on Record Bitcoin Sale, Analyst Cut, and Market Jitters

Strategy Inc. (MSTR) shares declined 3.7% in morning trading, hitting a session low of $91.78. The drop was attributed to a combination of company-specific news, a lowered analyst price target, and a difficult macroeconomic backdrop.

The main driver for the decline was a company disclosure, filed with the SEC, that it had sold 3,588 Bitcoin for approximately $216 million between June 29 and July 5. The company stated the sale, its largest since initiating its treasury strategy in 2020, was to fund preferred stock dividend obligations. Compounding this, Strategy reported an $8.32 billion loss on its digital assets for the second quarter, primarily due to an $8.31 billion unrealized loss as the value of its holdings fell below its cost basis.

Adding to the pressure, Mizuho analyst Dan Dolev cut his price target on the stock by nearly 20% to $213 from $265, citing revised estimates for the company's Bitcoin holdings and a lower price forecast for the cryptocurrency. While Dolev maintained an Outperform rating, the reduction highlighted concerns about the company's capital model, particularly with its annualized preferred dividend obligations climbing to around $1.5 billion and its Bitcoin cost basis sitting well above current market prices.

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The broader market environment also contributed to the stock's fall. Escalating military hostilities between the U.S. and Iran have unsettled global markets, leading to a sell-off in risk assets. This has pushed Bitcoin prices lower, which has an amplified negative effect on Strategy's stock due to its high correlation with the cryptocurrency. Major U.S. stock indices were also down, reflecting widespread risk-off sentiment among investors.