Key Takeaways
- Strategy shares fell 11% in a week, and an almost 8% drop on Friday did most of the damage, after a record $6.3 billion Binance hack knocked bitcoin below $80,000 and hit crypto stocks, Coinbase included.
- Strategy’s third-quarter report showed bitcoin per share down 3.7% this year, as it sold new shares to buy back STRC preferred stock.
- Andrew Kang steps down as CFO on Nov. 5, and MSCI’s Nov. 11 index decision is the next big test.
Strategy (MSTR) stock fell 11% in the past week, and an almost 8% drop on Friday did most of the damage. A record $6.3 billion hack at Binance, disclosed late Thursday, knocked bitcoin below $80,000, and crypto stocks sold off together before Friday’s open.
Coinbase Global (COIN) took it harder, down about 13% over the week, as the hack landed on a trading slump. Coinbase reported its own third quarter that Thursday evening, and its 10-Q shows transaction revenue fell 44% from a year earlier to $590.2 million. After a hack at a rival, do traders move to Coinbase, or step back from crypto?
The hack explains Friday. Strategy’s own report, filed the same evening, matters more for what comes next.
A Record Quarter, and a CFO Exit
Thursday’s report showed record third-quarter operating income of $20.91 billion, nearly all of it a gain on its bitcoin. But revenue of $125.4 million missed the $129.0 million consensus, and CFO Andrew Kang is stepping down on Nov. 5.
Bitcoin per Share Is Going Backwards
“Strategy demonstrated its commitment to returning STRC to health,” CEO Phong Le said in the release.
It spent $2.04 billion buying back STRC, its 12% preferred stock, this year. But its funding engine was already running in reverse: Strategy raised $5.41 billion selling stock in the third quarter, much of it to fund those buybacks and build cash, and just $58.7 million from Oct. 1 to 23.
BTC Yield, Strategy’s measure of growth in bitcoin per share, was -3.7% for the year to Oct. 25, down from +4.5% through July 26 and far short of management’s goal of about 10% a year.
TIKR Tracks 15 Analysts on Strategy. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Strategy, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Strategy’s Analyst Ratings
What’s Next for Strategy: MSCI’s Nov. 11 List
On Nov. 11, MSCI publishes the list of companies its new index rule could remove. Strategy isn’t confirmed as one of them, but removal would force index funds to sell at the Nov. 30 close.
The stock traded at 1.1x book value on Thursday, far below its 3.9x five-year average and its 25x peak in November 2024:
Wall Street’s average target of $239 is about 83% above Friday’s close.
I’d wait for MSCI’s list before buying, however cheap Strategy looks. Forced selling would hit a company whose bitcoin buying has already stalled. Of course, a strong bitcoin rally could get stock sales going again before then.
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!
