Benchmark Stays Bullish on Strategy Stock, Sees 406% Upside Despite STRC Selloff

Strategy’s STRC perpetual preferred stock has come under pressure in recent trading, briefly falling below $83 on Thursday before recovering to close near $89 in a holiday-shortened trading week.

Despite the weakness in STRC, Benchmark analyst Mark Palmer reiterated a bullish view on Strategy’s common stock, MSTR. The research firm maintained its Buy rating and $570 price target for MSTR.

Strategy’s common shares closed at $112.53 on Friday, down 3.5% on the session. Benchmark’s $570 target implies approximately 406% upside from that closing price.

Benchmark says Strategy’s broader bull case remains intact

Benchmark’s updated view centers on Strategy’s common stock and the company’s broader bitcoin-backed treasury model. While STRC has traded below the level Strategy has sought to support, Palmer characterized the move as a stress test of the company’s funding structure rather than evidence of a breakdown.

Palmer said STRC is a perpetual preferred stock with a variable dividend rate, supported by Strategy’s balance sheet and bitcoin treasury. The company currently holds more than 847,000 BTC, valued at roughly $55 billion, according to the report.

He noted that Strategy’s goal has been to support STRC’s trading near $100, but not to guarantee that level.

STRC selloff is not comparable to TerraUSD collapse, analyst says

Palmer also pushed back against comparisons between STRC’s recent trading weakness and the 2022 collapse of TerraUSD and Luna. He described those comparisons as fundamentally misplaced because the instruments operate under different structures.

TerraUSD was designed to maintain a dollar peg through an algorithmic mint-and-burn mechanism involving Luna. When confidence in that system broke down in 2022, the ecosystem collapsed and erased around $40 billion in value.

By contrast, Palmer said STRC is not a stablecoin and does not depend on algorithmic arbitrage or a reflexive token structure.

STRC repricing seen as a funding model stress test

Benchmark said several aspects of STRC’s structure are being overlooked, including its variable dividend reset framework, liquidity profile, and Strategy’s growing cash reserve.

According to the report, Strategy’s cash reserve now stands at about $1.4 billion. The reserve is intended to support dividend flexibility and treasury management during periods when capital markets are less favorable.

Benchmark added that elevated trading volumes during the STRC selloff suggest active repricing rather than structural deterioration. While STRC trading below $100 may make Strategy’s preferred-share issuance strategy less efficient, Palmer does not view the recent weakness as a sign that the company’s broader model has failed.

Instead, Benchmark sees the pullback in STRC and Strategy’s common shares as a stress test for the company’s funding approach, with its bitcoin-backed balance sheet and ability to adjust capital structure mechanisms remaining central to the investment case.