MicroStrategy (NASDAQ: MSTR), the company with the largest Bitcoin holdings among corporations, is getting attention from Wall Street. They’ve increased their cash reserves to $3.75 billion and haven’t bought any more Bitcoin for the past five weeks.
Show
Mark Palmer, an analyst at Benchmark Equity Research, has reaffirmed his recommendation to buy the stock and predicts a price of $570. In a private message to clients, he explained that the company’s increasing cash reserves show careful financial planning which will actually support its long-term plan for buying Bitcoin, not suggest it’s backing away from that strategy.
According to a recent SEC filing from the week of July 26, 2026, Strategy sold approximately 5.43 million shares of its Class A common stock, raising $544.5 million. This, along with previous fundraising, increased the company’s dedicated USD Reserve to $3.75 billion. This reserve now covers about 2.1 years of the company’s annual preferred stock dividends and interest payments, which total around $1.76 billion per year.
The company didn’t buy any Bitcoin recently and continues to hold 843,775 BTC. They originally purchased these coins for an average price of around $75,476 each, representing a total investment of approximately $63.69 billion.
With Bitcoin currently trading around $63,400, the company’s Bitcoin holdings are worth about $53.57 billion. However, because the company bought the Bitcoin at a higher price, it currently faces unrealized losses of approximately $9 billion.
On July 27, Strategy shares finished the day at $98.65. Analyst Palmer believes the stock could reach $570, which represents a potential increase of over 470% from its current price. This is significantly higher than the average price target of around $300 predicted by the approximately 15 analysts who follow the company.
Building Liquidity Without Abandoning Bitcoin
Palmer highlighted that the company intends to continue buying Bitcoin for the long haul, while also strengthening its financial position. Having more cash on hand allows them to comfortably cover dividend payments and debt interest, avoiding the need to sell Bitcoin quickly during difficult market conditions.
In late June 2026, Strategy launched its official policy for USD reserves and a new system for managing digital credit capital. Approved by the company’s board, this policy sets aside funds specifically to cover preferred dividends and interest payments, ensuring at least 12 months of coverage.
The company approved plans to generate up to $1.25 billion by using its Bitcoin holdings, primarily to rebuild its cash reserves. It also authorized programs to buy back shares of its common and preferred stock.
In the last five weeks, Strategy has generated over $2 billion by selling company stock and also sold a small amount of Bitcoin. Instead of using this money to buy more cryptocurrency, they’ve focused on strengthening their financial position. According to Palmer, this isn’t a shift in their overall strategy, but rather a smart move to wait for better buying opportunities and protect the company from market swings.
Analyst Case for Significant Upside
Benchmark believes Strategy’s stock could reach $570 because improving its financial health will likely ease concerns about its funding method and allow it to keep adding Bitcoin for years to come.
As I understand it, Palmer has explained their approach to managing the company’s finances as moving beyond simply issuing shares to a more dynamic system. This means we can buy back stock if the price falls close to or below our net asset value, and we’ll be ready to increase our Bitcoin purchases again when market conditions become favorable.
Most other analysts remain optimistic, generally recommending a strong buy and predicting potential gains of 150-200%. However, they’ve lowered their initial price targets somewhat since Bitcoin’s price has stabilized.
Palmer believes their unique position—a strong cash reserve, a substantial Bitcoin holding of over 843,000 BTC (representing more than 4% of all Bitcoin in existence), and plans to buy more—will eventually bring back the high value investors previously placed on Strategy as a way to gain leveraged exposure to Bitcoin.
The market reacted somewhat positively to the recent reserve news. Stock prices increased slightly before and during the start of trading, coinciding with Bitcoin holding steady around $66,000. Certain preferred stocks, like STRC, also went up in value, suggesting investors are more confident the company will be able to pay its dividends.
Balancing Dilution Concerns and Long-Term Strategy
Financial analysts like Peter Schiff have pointed out that the company issuing more stock at prices close to or below its net asset value (NAV) – specifically between 1.0 and 1.2 times NAV – reduces the ownership stake of current shareholders, particularly because the value of its Bitcoin holdings is currently below what the company originally paid for them. While management had suggested they would limit issuing new shares when the stock price fell, they continued to do so in order to build up their cash reserves.
I understand there’s some short-term dilution happening, but honestly, I think it’s worth it. It significantly reduces the risk of Strategy needing to refinance debt or worry about dividend payments down the line. A stronger balance sheet means they’re better positioned to really benefit when Bitcoin goes up – and won’t be forced to sell their holdings at a bad time just to stay afloat or raise capital in a pinch. That’s a big relief as an investor.
With a $3.75 billion cash reserve and the ability to sell Bitcoin, the company now has enough resources to operate comfortably for an extended period. This provides leadership with flexibility in managing the current challenges.
Strategy will release its second-quarter earnings report on July 30th. The report should give us a better understanding of how the company handles digital asset accounting, its preferred dividend plans, and any changes to how it’s deciding where to invest its money.
Currently, an analyst at Benchmark is maintaining a $570 price target, believing the company’s move to hold more cash is a positive sign. This could lead to significantly higher stock prices, but it depends on Bitcoin’s recovery and the company restarting its practice of building up its Bitcoin holdings from a stronger financial position.
2026-07-28 16:22