TD Cowen: Strategy increases cash reserves, expected to cope with "long-term crypto winter"
Odaily Planet Daily reported that Bitcoin reserve company Strategy (MSTR) announced on Monday that it raised approximately $748 million through the issuance of common stock, increasing its cash reserves to $2.19 billion. Investment bank TD Cowen (TD Securities) pointed out that this move significantly enhances the company's liquidity and financial flexibility, enabling it to continue operating during the "long-term crypto winter."
TD Securities analysts stated in the report that the new cash reserves are sufficient to cover Strategy's interest and dividend expenses for about 32 months, helping the company to move forward steadily in a challenging market environment. "Consolidating liquidity during times of stress is always a prudent move, and this initiative also alleviates market concerns about the company's continued operating ability."
The agency reaffirmed its "buy" rating on Strategy and maintained a target price of $500 for the next 12 months. As of the time of writing, Strategy's stock price is approximately $165, having fallen over 43% year-to-date. Analysts noted that considering Strategy's embedded leverage effect on Bitcoin prices, along with the high volatility of Bitcoin prices and premiums, its target price remains reasonable within a one-year timeframe.
