Wall Street Analyst Signals Sell on Bitcoin Amid Rising Risks to Buying Strategy

Analyst Downgrades Strategy (MSTR) Over Bitcoin Buying Sustainability Concerns

Michael Saylor’s Strategy (MSTR), which has seen a remarkable 2,500% surge in its stock price over the past five years thanks to its aggressive Bitcoin acquisition strategy, may be approaching the limits of its capital-raising abilities, according to an analyst at Monness, Crespi, Hardt & Co.

In a recent report, analyst Gus Gala downgraded MSTR from a “neutral” to a “sell” rating, just two weeks after initiating coverage. Gala’s concerns stem from the company’s reliance on share issuance to fund its Bitcoin purchases. Strategy currently holds 528,185 BTC on its balance sheet, with consistent Bitcoin acquisitions made possible through common share issuance and sales of its preferred stock series STRK.

However, Gala argued that it will become increasingly difficult for Strategy to continue raising funds in this way, especially as the company has already used up $18.6 billion of its $21 billion common share offering. He also pointed out that without a shift towards fixed-income securities, the company’s Bitcoin strategy may face greater challenges.

With a price target of $220, Gala suggests nearly 30% downside potential from the current stock price, currently trading in the $300 range.

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