Strategy, the corporate bitcoin holder formerly known as MicroStrategy, bought another $2 billion worth of Bitcoin this week, according to a regulatory filing. The acquisition pushes its total hoard past 500,000 BTC. On the same day, TD Cowen analysts issued a note projecting a 139% increase in Strategy's share price over the next 12 months.
The $2 billion buy
Strategy didn't say exactly when it executed the purchase, but the filing shows the company paid an average price of roughly $94,000 per coin. That's a premium over recent spot prices, but the firm has never been shy about buying at market tops or bottoms. The latest haul was funded through a combination of a convertible debt offering and cash from its at-the-market equity program.
This isn't a one-off. Strategy has been on a buying spree since late 2020, and its total Bitcoin stash now represents about 2.5% of all coins that will ever exist. The company's CEO has made clear he sees Bitcoin as the ultimate treasury reserve asset — and he's betting the entire firm on that thesis.
TD Cowen's 139% call
TD Cowen's projection is startling even by crypto bull standards. The analysts, led by Josh Smith and Lance Vitanza, raised their price target on Strategy's stock to $1,850 from $1,200. The new target implies a 139% gain from Thursday's close. The reasoning: Strategy's growing Bitcoin pile, combined with a shrinking share count through buybacks, should amplify per-share NAV as Bitcoin appreciates.
The analysts also noted that Strategy's software business — yes, it still sells enterprise analytics software — continues to generate steady cash flow, which helps fund the Bitcoin purchases without diluting shareholders too much. They expect the software arm to churn out around $200 million in free cash flow this year.
Still, the call hinges on Bitcoin hitting new highs. TD Cowen's model assumes Bitcoin averages $130,000 over the next 12 months. At Friday's prices, it's got a long way to go.
Strategy's board recently authorized an additional $5 billion in share issuance for future Bitcoin buys, so the shopping isn't done. The company has also been selling convertible bonds at low coupons, taking advantage of the market's appetite for equity-linked crypto exposure. If Bitcoin stays flat or drops, Strategy's leverage becomes a risk. But if the TD Cowen scenario plays out, the company's total market cap could triple.
The next big catalyst: Strategy's Q2 earnings report in August, when it will disclose any additional purchases and update its Bitcoin yield metric. For now, the market is watching to see if the buying pace accelerates or slows.
