Benchmark Equity Research reiterated its Buy rating on Strategy (MSTR) and maintained a $570 price target despite a recent selloff in the company's STRC perpetual preferred stock, which briefly fell below $83 on Thursday before closing near $89 in a holiday-shortened trading week. Strategy shares closed at $112.53 on Friday, down 3.5% on the session, with Benchmark's target implying approximately 406% upside from that closing price. Benchmark analyst Mark Palmer stated the selloff reflects a market-driven reset of required yield rather than structural deterioration, emphasizing that STRC is backed by Strategy's treasury of over 847,000 BTC currently valued at roughly $55 billion.
Benchmark Maintains $570 Target With 406% Upside Implied
Benchmark Equity Research reiterated its Buy rating on Strategy, maintaining a $570 price target. Strategy shares closed at $112.53 on Friday, down 3.5% on the session, according to The Block's MSTR price page. Benchmark's $570 target implies approximately 406% upside from that closing price. The firm issued the note following a selloff in Strategy's STRC perpetual preferred stock during a holiday-shortened trading week.
Palmer Differentiates STRC From Stablecoins and Terra Collapse
Benchmark analyst Mark Palmer demystified comparisons between STRC's trading and the 2022 collapse of TerraUSD and Luna, arguing the instruments operate under fundamentally different structures. STRC, he said, is "not a stablecoin" or an asset backed by a reflexive token system reliant on arbitrage mechanisms. He described STRC as a perpetual preferred stock with a variable dividend rate backed by Strategy's treasury of over 847,000 BTC, currently valued at roughly $55 billion. "Strategy's objective has been to support STRC's trading at a level near $100, not to guarantee it," Palmer wrote in the note. "In our view, what has happened with STRC is best described not as a depeg --- something that was never pegged cannot be depegged --- but as a market-driven reset of required yield."
Strategy Holds $1.4 Billion Cash Reserve for Dividend Flexibility
Benchmark said several aspects of STRC's structure are receiving insufficient attention, including its variable dividend reset framework, liquidity profile, and the company's expanding cash reserve. The cash reserve now stands at roughly $1.4 billion and is intended to support dividend flexibility and treasury management during periods of tighter capital markets. The firm added that recent trading activity, including elevated volumes during the selloff, points to active repricing rather than structural deterioration. According to the note, Benchmark views the recent selloff in STRC and Strategy's common shares as a stress test of the funding model rather than evidence of a breakdown, pointing to continued bitcoin-backed balance sheet support and the firm's ability to adjust capital structure mechanisms over time.
FAQ
What price target did Benchmark set for Strategy after the STRC selloff?
Benchmark Equity Research reiterated a $570 price target on Strategy (MSTR), implying approximately 406% upside from the $112.53 closing price on Friday.
How did Benchmark analyst Mark Palmer describe the STRC selloff?
Mark Palmer stated that STRC is "not a stablecoin" and described the selloff as "a market-driven reset of required yield" rather than a depeg, emphasizing that STRC is a perpetual preferred stock backed by Strategy's treasury of over 847,000 BTC valued at roughly $55 billion.
What is the size of Strategy's cash reserve according to Benchmark?
Benchmark reported that Strategy's cash reserve now stands at roughly $1.4 billion, intended to support dividend flexibility and treasury management during periods of tighter capital markets.
