Why Strategy Stock (MSTR) Is Up Today and What B. Riley Expects From Here

Strategy (NASDAQ:MSTR) shares are up about 5% in Friday’s trading session, moving almost in lockstep with Bitcoin, which is also climbing by almost the same amount. For investors familiar with the company, the connection between the two is about as straightforward as it gets.

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Strategy– led by Bitcoin evangelist Michael Saylor – is the world’s first and largest Bitcoin treasury company. It holds 738,731 BTC – about 3.52% of the total Bitcoin supply – purchased for $56.04 billion, or roughly $75,862 per coin. The company funds its Bitcoin purchases through a mix of capital sources, including common equity ATMs, convertible senior notes, and several series of perpetual preferred stock and then invests those proceeds into BTC. Its long-term value growth relies on Bitcoin’s CAGR (compounded annual growth rate) outpacing the company’s blended cost of capital.

When Bitcoin grows faster than financing costs and dilution, each share gradually gains more BTC backing. For this strategy to fully succeed, three things need to happen: Bitcoin must sustain a strong CAGR, the company needs access to capital at rates lower than Bitcoin’s returns, and the stock must trade at or above NAV (net asset value) to issue new shares without diluting value. If shares fall below NAV, issuing new common stock dilutes BTC per share – a factor that limited Strategy’s equity raises at times in late 2025 and early 2026.

Currently, MSTR trades at about 1.2x mNAV, meaning the market value of its equity is roughly 1.2 times the net asset value of its Bitcoin holdings. This represents a significant drop from its 2024 peak of 3.4x.

With BTC having pulled back significantly from its October 2025 all-time high of ~$126,000, B. Riley analyst Fedor Shabalin thinks this valuation reflects the market reassessing how much of a premium is warranted for leveraged Bitcoin exposure during a period of weaker BTC prices. For Shabalin, though, the compression represents an “attractive entry point.”

The analyst thinks the investment thesis for MSTR rests on three “key points.” First, its unmatched scale and first-mover advantage. “No other public company holds even one-fifth of this position, creating a structural moat in terms of institutional credibility, index inclusion (Nasdaq 100 constituent since December 2024), and capital markets access,” Shabalin explained.

Second, a “diversified and innovative capital structure.” The company’s digital credit platform spans six different securities plus $8.2 billion in low-cost convertible notes, giving it access to a wide range of investor types – including equity, convertible arbitrage, income-focused, and international investors – and the flexibility to raise capital under varying market conditions.

Lastly, the company boasts a robust cash reserve and improving credit profile: a $2.25 billion cash buffer provides roughly 30 months of coverage for interest and dividend obligations, while its first S&P credit rating of B– with a stable outlook strengthens credibility and opens the door to a broader institutional investor base.

Taken together, Shabalin believes the setup supports a Buy rating on MSTR shares, alongside a $175 price target. If achieved, that would translate into ~22% upside over the coming year. (To watch Shabalin’s track record, click here)

The broader Street is aiming much higher; the average price target stands at $297.73, implying a massive 108% upside from current levels over the coming year. Overall, all 10 other recent analyst reviews on MSTR are positive, giving the stock a Strong Buy consensus. (See MSTR stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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