Michael Saylor-led Strategy (MSTR) (formerly MicroStrategy) is Strategy-ing as they would say. As Bitcoin (BTCUSD) continues to trade below levels of $80,000, the world's largest holder of the world's most popular and biggest cryptocurrency has added to its pile. The company bought 3,273 bitcoins for an average price of $77,906, for a total value of about $255 million last week.
And as I had pointed out earlier in my most recent piece about the Bitcoin treasury company, its market cap of $56.5 billion is now below the value of its total Bitcoin holdings, which is currently hovering around $61 billion.
However, a peek at the share price action would reveal that the company has not been having a good time. MSTR stock is down 58% over the past year.
So, amid this duality of the value of its BTC holdings exceeding its market cap and weak stock movement, how should one play MSTR stock? Let's find out.
Still One of the Best Proxy BTC Plays
Even as a plethora of Bitcoin ETFs have proliferated the market, Strategy continues to be the preferred proxy play to own it. A recent development acted as a stark reminder of the same.
Just about a week ago, Strategy overtook BlackRock's (BLK) iShares Bitcoin Trust ETF (IBIT). While Strategy now owns 818,334 BTC, the IBIT has 806,178.381 of the same as of April 20. With similar levels of AUM of around $61 billion, what is attracting some investors towards owning the stock of Strategy over the much less volatile IBIT (MSTR has a 60-month beta of 3.55, and IBIT has a 60-month beta of 2.52)?
Well, a key reason for this is leverage. While Strategy can issue convertible debt to buy more Bitcoins, the IBIT ETF is incapable of doing so. Although it is a double-edged sword, by owning the convertible bonds of the company, Strategy bondholders enjoy the optionality of owning its stock if things go sideways. This is not the case for IBIT, as it is a passive 1:1 holding vehicle, which closely tracks the price of Bitcoin with low tracking error.
Further, for owning the strategy, the shareholders do not have to pay any fee. However, with an expense ratio of 0.25%, owning IBIT requires a fee. In fact, owning any ETF requires a fee, which acts as a drag on the overall shareholder return.
Finally, although it is not its focus anymore, Strategy still operates an enterprise and software business, which still generates revenue that can support its Bitcoin purchases whenever and if the need arises. This is not the case for IBIT, which is solely focused on owning BTC and tracking its price.
Apart from that, Strategy's innovative funding of Bitcoin purchases and strategic initiatives also gives it credence as a reliable proxy BTC play.
Financials Hanging In There
Coming to its financials, Strategy reported mixed financial results for the quarter, beating expectations on revenue but missing significantly on earnings. The earnings shortfall was largely attributed to a change in fair value accounting and falling Bitcoin prices.
The company, which generates all its revenue from software, posted sales of $123 million. That represented a modest 2% increase from the same period a year earlier. The firm recorded a loss of $42.93 per share, a sharp widening from the $3.03 per share loss reported in the prior year period. This figure also fell well short of the consensus estimate calling for a loss of $0.08 per share.
On the balance sheet, cash holdings grew substantially to $2.3 billion by the end of 2025, while short-term debt remained minimal at $31.3 million.
The company’s BTC yield declined to 22.8% in 2025 from 74.3% the previous year. Nevertheless, Strategy recorded gains of $8.9 billion on its Bitcoin holdings and added 101,873 bitcoins to its portfolio during the year.
Analyst Opinion of MSTR Stock
Considering all this, analysts have earmarked an overall consensus rating of “Strong Buy” for MSTR stock. The average target price is $360.06, which indicates an upside potential of more than 100% from current levels. Out of 18 analysts covering the stock, 15 have a “Strong Buy” rating, one has a “Moderate Buy” rating, and two have a rating of “Hold.”
