StoneX's Mark Palmer Explains $435 MSTR Price Target and DAT Consolidation Outlook
Key Takeaways
- •StoneX lowered its price target on Strategy (MSTR) to $435, a decision Senior Equity Research Analyst Mark Palmer explained in a Bitcoin Magazine interview.
- •Strategy allocated roughly $176 million to buybacks of its STRC preferred stock, known as "Stretch," about six times the roughly $29 million it directed toward bitcoin purchases.
- •Palmer identified the STRC preferred stock as central to Strategy's capital raising, with the company's $4.9 billion USD Reserve helping push the shares back toward their par value.
- •Strategy is unlikely to simply raise STRC's dividend rate because that would commit it to larger recurring payments on every preferred share, an instrument that pays dividends daily rather than on the quarterly cadence typical of most preferred stocks.
- •Palmer outlined a checklist for evaluating digital asset treasury companies, covering how close STRC trades to par, the size of Strategy's USD Reserve, the pace of convertible note paydowns, and the development of Metaplanet's expansion into the United States.
StoneX Senior Equity Research Analyst Mark Palmer joined Bitcoin Magazine to explain the reasoning behind his firm's reduced $435 price target on Strategy (MSTR) and to lay out his outlook on consolidation among digital asset treasury (DAT) companies — public companies that hold bitcoin as a treasury asset.
The conversation opens with Strategy's recent capital allocation. The company — formerly MicroStrategy and the largest corporate holder of bitcoin — spent roughly $176 million buying back its STRC preferred stock, nicknamed "Stretch," versus about $29 million on bitcoin purchases, a six-to-one ratio. Palmer weighs whether that split serves the interests of MSTR shareholders.
A central theme is STRC's role in Strategy's fundraising. Palmer explains why the preferred stock is foundational to how the company raises capital and how its $4.9 billion USD Reserve is pushing STRC back toward par — the face value at which preferred shares are issued. He also explains why Strategy won't simply raise the dividend rate, a move that would commit the company to larger recurring payments on every preferred share.
Other topics include the mechanics of STRC's daily dividends — a break from the quarterly cadence of most preferred stocks — and the volatility that can surround ex-dividend dates, the cutoff after which new buyers no longer receive the upcoming dividend, along with June's sell-off in Stretch and the involvement of institutional investors, and where stress in a bitcoin treasury balance sheet tends to show up first.
Palmer also contrasts perpetual preferred stock — shares with no maturity date — with convertible notes, debt instruments that can convert into equity, pointing to Strive's approach, and discusses USD cash holdings, convertible note paydowns, and Metaplanet's push into the United States. He closes by detailing why StoneX cut its MSTR price target to $435 — a discussion that hands readers a checklist for the DAT sector: how close STRC trades to par, the size of Strategy's USD Reserve, the pace of convertible note paydowns, and how Metaplanet's US expansion develops.
The interview was published on Bitcoin Magazine and is written by Patrick Green.
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