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In recent days, Strategy Inc. (formerly MicroStrategy) continued its aggressive approach of raising capital through preferred share issuances to acquire more Bitcoin, bringing its total holdings to well over 640,000 BTC, now valued at nearly US$80 billion.
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This bold accumulation strategy has led to the company’s valuation drawing close to the market value of its crypto holdings, sparking debate about the sustainability and business risks of this model amid ongoing Bitcoin price volatility.
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We’ll explore how investor scrutiny of Strategy’s leveraged Bitcoin approach is shaping its investment narrative and future prospects.
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The crux for anybody considering Strategy Inc. as an investment is a belief in the idea that a company can offer equity-level exposure to Bitcoin while maintaining operational relevance in enterprise software and AI. The recent aggressive capital raises to acquire more Bitcoin have ramped up investor scrutiny, especially as the dividend costs and potential common share dilution accelerate. This provides fuel for both short-term debate and share price volatility, at a time when Strategy trades at a premium much closer to the underlying value of its crypto holdings than before. Given the heavy Bitcoin dependency, recent price moves, such as the stock trailing both the S&P 500 and Bitcoin despite a crypto rebound, signal that core catalysts like more BTC accumulation or AI product traction might no longer spark the same market reaction, while risks such as capital structure stress and further legal action could weigh more heavily in the months ahead. For now, the impact of the latest news appears material, putting Strategy’s leveraged model in sharper focus as both reward and risk.
But with ongoing lawsuits and rising dividend costs, pressure on the company’s financial flexibility is mounting. Our valuation report here indicates Strategy may be undervalued.
Fair value estimates from 18 members of the Simply Wall St Community range widely, from as low as US$53 to more than US$670 per share. While many see potential far beyond current analyst price targets, several anticipate considerable downside, highlighting how opinions diverge when the business model faces new legal and liquidity risks.
Explore 18 other fair value estimates on Strategy – why the stock might be worth over 2x more than the current price!
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