Key Takeaways
- Strategy stock has fallen 13% since Sept. 22 (through Friday’s close), most of it on Oct. 16, after MSCI’s new rule put Strategy’s place in its global indexes at risk.
- Funds tracking MSCI hold only about 13 million shares, but the rule threatens the premium Strategy needs to keep selling stock for bitcoin.
- Strategy bought just over 500 bitcoin in two weeks while putting more than $190 million a week into repurchases of its STRC preferred stock.
- Third-quarter results on Oct. 29 and MSCI’s Nov. 11 list come next, and the list is worth waiting for before buying more.
Strategy (MSTR) stock is down 13% since Sept. 22 (through Friday’s close), more than twice the Nasdaq 100’s 6% drop. Most of that came the day after MSCI (MSCI) changed who qualifies for its indexes, and bitcoin’s slide did the rest.
Bitcoin’s slide, with leverage on top
Bitcoin fell below $84,000 on Oct. 7 in a wave of leveraged selling, then slid again on Oct. 14 after a hotter-than-expected inflation report. Strategy went down with it, as did crypto stocks in general (Coinbase (COIN) fell 16% over the month).
The stock moves harder than the coin, both ways. When the OCC finalized its GENIUS Act stablecoin rules on Oct. 21, bitcoin rose about 3% and Strategy rose roughly three times as much.
That’s leverage at work: debt and preferred stock sit ahead of common shareholders, and the premium investors pay swings on top. Strategy’s total debt went from $2.25 billion in fiscal 2023 to $8.25 billion in fiscal 2025…
MSCI hit the premium
On the evening of Oct. 15, MSCI adopted a rule that makes non-operating companies ineligible for its global indexes. Strategy fell 10% the next day, even with bitcoin up that morning. MSCI will name the companies it hits on Nov. 11, and the rule kicks in at the Nov. 30 close.
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The forced selling is small: funds tracking MSCI hold about 13 million shares, less than a day’s volume. The premium takes the bigger hit. Strategy grows the bitcoin value behind each share, net of its debt and preferred stock, by selling common stock above that net value and buying more bitcoin. Its gauge for that cushion, mNAV (the share price divided by net bitcoin value per share), was only about 1.07x in August. Without index funds as reliable buyers, a premium that thin is harder to win back.
And it’s the whole pitch. As Strategy founder and executive chairman Michael Saylor said on Bloomberg Talks on Oct. 13: “you should buy the digital equity of a company like MSTR or Strive and you can expect to outperform Bitcoin because we’re able to amplify our Bitcoin per share with our digital credit.”
Selling stock has paid for that. Diluted shares nearly tripled from fiscal 2021 to fiscal 2025, and the count has kept climbing this year…
The bitcoin buying has slowed to a trickle
Strategy raised just $21 million from common stock in the week to Oct. 11, enough for 250 bitcoin. Over those same seven days, it bought back $192.4 million of its STRC preferred stock.
The next week, it bought 267 bitcoin for $22.1 million and spent $193.1 million more on STRC, and on Oct. 19 its board added $1 billion to the buyback. Over those two weeks, Strategy put about nine times as much into its preferred stock as into bitcoin, all while Saylor was telling Bloomberg that bitcoin’s bull market is just beginning.
I’d wait for Nov. 11
Three dates come first: Oct. 28, when shareholders vote on paying preferred dividends daily; Oct. 29, when third-quarter results land after the bell (with an estimated $20.91 billion digital-asset gain already disclosed); and Nov. 11, when MSCI publishes its list.
Analysts still see plenty of upside: the consensus target was $239 on Oct. 16, 64% above Friday’s close, though down from $560 a year earlier…
Cantor Fitzgerald raised its target to $208 from $186 on Oct. 16, and its target rests mostly on bitcoin reaching $112,000 within 12 months.
Personally, I wouldn’t sell over one index rule and bitcoin’s swings, but I wouldn’t load up before Nov. 11 either. Until the list is out, Strategy is just bitcoin with leverage.
Of course, if mNAV holds above 1x even with Strategy on the list, stock sales that fund bitcoin purchases would keep adding net bitcoin value per share, and the leverage that hurt this month could start working for it.
So what is Strategy stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
