MicroStrategy Stock Cash Reserves Boost Signals Upside

After a flurry of equity sales, Strategy has expanded its cash buffer, with microstrategy stock drawing fresh scrutiny from Wall Street analysts.

Strategy raises $747.8 million while pausing Bitcoin purchases

Between December 15 and 21, Strategy sold 4.5 million shares of its Class A common stock. The at-the-market share sale generated $747.8 million in net proceeds, significantly strengthening the company’s liquidity position without executing a traditional secondary offering.

The new capital lifted Strategy’s U.S. dollar reserves to $2.19 billion. Executive chairman Michael Saylor disclosed the updated figures in a post this week, underscoring the firm’s focus on cash management alongside its large Bitcoin exposure.

However, the company did not purchase any Bitcoin during this share sale window. Strategy’s most recent Bitcoin acquisition occurred on December 15, when it bought 10,645 BTC for $980.3 million at an average price of $92,098 per coin, maintaining its strategy of using capital markets access to expand its crypto treasury.

Bitcoin holdings and acquisition cost profile

Following the latest transactions, Strategy now holds 671,268 Bitcoin valued at over $59 billion. The company acquired this stash at an aggregate purchase price of $50.33 billion, which translates to an average cost basis of $74,972 per coin, highlighting its long-term high-conviction bet on the leading cryptocurrency.

Moreover, the firm only recently formalized a large U.S. dollar reserve alongside its Bitcoin position. Strategy established this cash reserve in early December with an initial $1.44 billion, signaling a more structured approach to managing both digital and fiat assets on its balance sheet.

The reserve is designed to support dividend payments on preferred stock and interest payments on outstanding debt. That said, management has emphasized that this capital is ring-fenced for obligations rather than new Bitcoin accumulation, providing clarity to equity and credit investors.

Growing cash buffer and extended coverage window

Strategy indicated it intends to maintain U.S. dollar reserves sufficient to cover at least 12 months of interest and dividend obligations. Furthermore, the company ultimately aims to extend that coverage to 24 months or more as financing conditions and equity market access permit.

According to analysts at TD Securities led by Lance Vitanza, the expanded reserve significantly strengthens Strategy’s capacity to operate through volatile or adverse market environments. The analysts calculate that the current reserve now covers roughly 32 months of interest and dividend obligations, far exceeding the initial 12-month target.

“The move underscores the company’s balance sheet strength and should alleviate concerns about its ongoing viability, even in a prolonged ‘crypto winter’ scenario,” the TD Securities team wrote in a report published Monday. However, they also stressed that execution discipline on capital allocation will remain a key factor for investors.

Share issuance, trading dynamics, and stock performance

Over the past four weeks, Strategy has sold more than 22 million shares into the market. The firm structured these sales to roughly match average daily trading volume, seeking to avoid excessive price disruption or liquidity stress for existing shareholders.

Moreover, TD Securities noted that the paced equity issuance did not materially impair market liquidity for Strategy common stock. This approach may be particularly relevant for investors monitoring Strategy share sales as a source of potential overhang or volatility.

At the time of writing, Strategy shares traded around $165. The stock is down more than 43% year-to-date, and Strategy common stock has fallen nearly 50% over the past year, reflecting both sector-wide weakness and concerns about leverage and Bitcoin exposure.

Analyst views, upside scenarios, and Bitcoin linkage

Despite the drawdown, TD Cowen reiterated its buy rating on Strategy with a $500 price target. This implies potential upside of nearly 200% from current levels, assuming the company executes on its strategic roadmap and market conditions stabilize.

In their latest report, TD Cowen analysts forecast that Strategy could own approximately 835,000 Bitcoin by the end of fiscal year 2027. They project an intrinsic Bitcoin-linked value of roughly $380 per share in one year and $515 in two years, tying a large portion of their valuation framework directly to the company’s crypto exposure.

That said, TD Cowen stressed that worries about the firm’s balance sheet viability appear overstated. In their view, Strategy’s recent moves to bolster its liquidity and extend coverage of interest and dividend obligations demonstrate meaningful microstrategy liquidity strength during periods of market stress.

In parallel, the broader crypto market backdrop remains mixed. Bitcoin was trading near $89,433, down 4.4% over the past 12 months, providing a volatile benchmark against which investors evaluate the risk and reward of microstrategy stock compared with direct Bitcoin exposure.

Outlook for investors

For equity investors, Strategy’s combination of a large Bitcoin position, expanding U.S. dollar reserves, and ongoing at-the-market equity issuance presents a complex risk profile. However, the reinforced cash buffer and extended coverage window could reduce near-term solvency concerns and shift focus back to execution, Bitcoin price dynamics, and long-term capital allocation decisions.

In summary, Strategy’s latest cash raise, pause in new Bitcoin purchases, and updated reserve strategy collectively strengthen its balance sheet, while analyst targets highlight both the upside potential and the heightened volatility embedded in its Bitcoin-centric business model.