Galaxy Research Takes a Cautious Stance on Strategy's Bitcoin Financial Strategy Revision

Galaxy Research has stated that there is controversy over whether Strategy's revision of its Bitcoin financial strategy is a complete solution to the issues at hand. Alex Son, the head of research, raised doubts about whether the new "Digital Credit Capital Framework" can resolve capital structure problems. This framework grants Strategy the authority to sell up to $1.25 billion worth of Bitcoin, with the company currently holding 847,363 BTC. Strategy is facing approximately $14 billion in unrealized losses. The framework readjusts preferred stock dividend conditions and sets aside $2.55 billion in cash reserves, which are restricted for use solely for preferred dividends and debt interest payments. This cash reserve is expected to be maintained for about 17 months at an annual expenditure rate of approximately $1.76 billion. In May, Strategy secured about $2.5 million from Bitcoin sales. Following the announcement of the new regulations, MSTR's stock price rose by 12.6%, reaching $92.68, and STRC preferred shares also increased. Benchmark Equity Research has positively evaluated this framework, setting a target stock price of $570.

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