Options traders are increasingly taking bearish positions against Strategy (MSTR), a prominent cryptocurrency treasury company. This trend is evidenced by a surge in heavy put buying activities, particularly linked to spread strategies associated with the YieldMax Short MSTR Option Strategy ETF (WNTR). This ETF not only bets against MSTR stock but also generates income through put spreads. The performance statistics reveal a stark contrast: MSTR’s stock has declined by 32.2% over the past month, while WNTR has seen an increase of 17.4% during the same period, hinting at the potential for a short squeeze.
The current challenges facing Bitcoin (BTCUSD), primarily triggered by concerns surrounding quantum computing, have further exacerbated MSTR’s stock situation. Nevertheless, analysts at Bernstein suggest that the shift in investor focus toward AI stocks has merely redirected retail capital, rather than indicating a loss of overall confidence in cryptocurrency.
Despite these challenges, Strategy continues to support Bitcoin, holding an impressive 845,256 BTC. Established in Tysons Corner, Virginia, Strategy—previously known as MicroStrategy—has rebranded itself as the world’s largest Bitcoin Treasury Company and offers AI-driven enterprise analytics software through cloud subscriptions. This transformation emphasizes Bitcoin as its primary treasury reserve asset while integrating it into an innovative business model that aims to blend financial and technological advancements. The company’s current market capitalization stands at approximately $42.21 billion.
However, external factors such as a decline in Bitcoin prices, increasing debt, and the dilution of shares to finance its cryptocurrency accumulation have adversely impacted MSTR’s stock performance. Over the past year, the stock has plummeted by 66%, and it has dropped 16.29% year-to-date (YTD), though it has seen a recovery of 22.1% from its 52-week low of $104.17 recorded on February 5.
In its recent earnings report, Strategy disclosed an 11.9% year-over-year increase in its first-quarter revenue, amounting to $124.30 million. As of May 3, the company reported holding 818,334 Bitcoins, reflecting a 22% YTD growth and a BTC yield of 9.4%. Despite this, Strategy also faced a substantial operating loss of $14.47 billion for Q1, largely attributed to an unrealized loss of $14.46 billion on its digital assets.
In a significant move to boost investor appeal, the company proposed a shareholder vote to increase the dividend payment frequency for its short-duration high-yield credit perpetual preferred stock, Stretch (STRC), to a semi-monthly schedule. This proposal was subsequently approved by stockholders.
Wall Street analysts exhibit mixed sentiments regarding the trajectory of Strategy’s bottom line. Projections indicate that earnings per share (EPS) for fiscal 2026 could grow significantly to $116.70; however, expectations for fiscal 2027 show a potential decline of 36% annually to $74.73.
Analysts are also adjusting their price targets for MSTR stock. Canaccord Genuity’s Joseph Vafi maintained a “Buy” recommendation but sharply reduced the price target from $224 to $163, indicating a reassessment of the company’s growth prospects. Similarly, Mizuho analysts kept an “Outperform” rating but lowered their target from $320 to $265, emphasizing that Strategy maintains about $2 billion in reserves to cover expected dividends for the next two years and is likely to return to profitability by 2026. On the other hand, TD Cowen recently raised its price target on MSTR to $400 while maintaining a “Buy” rating, citing confidence in the company’s aggressive Bitcoin acquisition strategy.
The consensus outlook on MSTR remains strong overall, with a majority of analysts—15 out of 18—rating it a “Strong Buy.” One analyst has suggested a “Moderate Buy,” while another has opted for a cautious “Hold” rating, and one analyst holds a “Strong Sell” position. The consensus price target of $363.62 signifies a substantial potential upside of nearly 186% from current levels, with the highest price target set at $645, suggesting an impressive 407.1% upside.
