Strategy (NASDAQ: MSTR) stock price is down by 3.88% today, September 8, to trade at $137 at the time of writing. The drop comes despite Strategy announcing that it bought back $176 million worth of STRC stock in an attempt to push the preferred stock back to its $100 par value.
MSTR stock drop also suggests that buyers did not react to the stock’s upgrade by Canaccord, with the firm citing Bitcoin’s bullish outlook.
Canaccord Raises MSTR Stock Target Again
Canaccord, a wealth manager that oversees nearly $115 billion in client assets, has once again reiterated a buy rating for Strategy shares while also raising the stock’s target from $175 to $179.
MSTR stock was trading at $137 at press time, suggesting that Canaccord foresees a 30% upside for the shares.
Per the wealth manager, MSTR will reach this target of $179 if the price of Bitcoin rises by 20% over the next 12 months. If this occurs, Canaccord estimates that Strategy will have a net asset value that is 1.2 times its Bitcoin holdings.
On August 25, Canaccord had once again raised its target for the MSTR stock from $130 to $175, attributing that raise to the profitability of the company’s Bitcoin holdings and improving conditions in the crypto market.
Data from Saylor Tracker shows that Strategy’s stash of 845,050 BTC is now sitting at an unrealized profit of $2.42 billion.
STRC Stock Fails to Hit Par Despite Ongoing Buyback
STRC, the preferred debt instrument that Strategy uses to raise money to purchase Bitcoin, traded at $97.96 at the time of writing.
This stock had only gained by 0.22% despite Strategy announcing that it repurchased $176 million worth of the preferred stock in an attempt to push it back to the par value of $100.
Analyst StrategyMaxi on X says that STRC may never reach the par value of $100 unless Strategy makes a big buyback of $2 billion in shares, hikes dividend rates, or Bitcoin price makes a massive gain.
While announcing its $176 million STRC repurchase, Strategy also said that it had increased its Digital Credit Securities Repurchase Program from $1 billion to $2 billion.
This hike has drawn criticism, with one analyst on X, dubbed Gene, saying that he had initiated a short position on Strategy because of the dilution of the company’s shares and a “broken business model.”
Another analyst dubbed BTC Bro also opined that despite Strategy spending $811 million so far to buy back STRC, the preferred stock is still not at par, which makes shorting MSTR stock “the easiest trade,” especially if Bitcoin remains stuck at $78,000.
MSTR Stock Price Forecast as 20-week EMA Holds
The price of MSTR stock is defending the support at the 20-week EMA of $124. It has tested this support for two straight weeks and closed above it, suggesting that the short-term trend is bullish.
If the crypto stock remains above the 20-week EMA, the price could reach the 200-week EMA of $168. A close above this EMA will support a bullish long-term MSTR stock outlook.
The RSI reading of 51 suggests that the momentum is now neutral, with neither bulls nor bears having the upper hand. However, zooming in on the RSI line shows the formation of a higher high as bears lose their grip.
Still, if the crypto market sentiment continues to weaken and the MSTR stock drops below the 20-week EMA, it could drop to $105.
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