Strategy ($MSTR) is seeing a sea of red this morning, with the stock price tumbling as low as $115.14, a drop of more than 10% from yesterday’s close. For a company that has effectively turned itself into a leveraged bet on Bitcoin, today’s market action is a combination of falling crypto prices and nervous institutional selling. After peaking above $450 last year, the stock is now trading at its lowest levels in over 17 months, leaving many investors wondering if Michael Saylor‘s Bitcoin treasury model is finally hitting a breaking point.
Bitcoin Slips Below the $70,000 Support Level
The primary reason for the crash is the sudden weakness in Bitcoin (BTC-USD). The digital asset dropped below $70,000 early Thursday morning, dragging every crypto-linked stock down with it.
- Leverage Effect: Because Strategy uses billions in debt to buy Bitcoin, its stock often moves twice as fast as the actual coin. When Bitcoin drops 4%, MSTR often drops 8% to 10%.
- Cost Basis Concerns: With Bitcoin hovering around $69,000, Strategy is now dangerously close to its average purchase price of $76,052. Investors fear that if the price stays below this “break-even” point, the company will have to report massive non-cash losses that could trigger debt covenants.
Wall Street Braces for a Grim Earnings Report
Adding to the panic, Strategy is scheduled to release its Q4 2025 earnings today after the market closes. Analysts are not expecting good news.
- Negative Earnings: Wall Street expects a massive loss, with a consensus estimate of -$19.03 per share.
- Revenue Stagnation: The company’s original software business is expected to show almost no growth, with revenue projected at just $118 million.
- Dilution Fears: Investors are worried that Michael Saylor will announce more At-The-Market (ATM) stock sales to raise cash, which would lower the value of current shares even further.
Analysts Slash Price Targets as Premiums Vanish
The premium that investors used to pay to own Bitcoin through Strategy is quickly disappearing. Historically, people paid 2x the value of the actual Bitcoin just to own the stock, but that number has crashed to almost 1x.
- Joseph Vafi at Canaccord Genuity recently cut his price target from $474 all the way down to $185. While he still has a “Buy” rating, the 60% reduction in his target price sent a shockwave through the market.
- Ryan Brinkman at JPMorgan remains a major bear, highlighting that the company now faces over $680 million in annual interest and dividend obligations that its software business simply cannot cover.
Is Strategy Inc a Buy or Sell?
According to TipRanks, MSTR stock has a consensus Strong Buy rating among 11 Wall Street analysts. This rating is based on nine Buys and two Holds assigned in the past three months. The average 12-month MSTR price target of $387.67 implies 241% upside from current levels.
