MSTR Dumps 6% Despite Bullish TD Cowen Projection: What Is Going On?

Strategy Inc. (NASDAQ:MSTR) is down to $165 even as TD Cowen raised its price target to $400 from $395, citing faster Bitcoin (CRYPTO: BTC) accumulation and a $1.5 billion accretive repurchase of convertible notes.

Strategy Already Exceeded Q2 Bitcoin Purchase Forecast

Strategy has already acquired more Bitcoin partway through Q2 than TD Cowen had modeled for the entire quarter. 

The firm now forecasts roughly 100,000 BTC purchased in Q2 alone, lifting full-year BTC Yield projections to 19.8% from 18.2%.

Preferred equity issuance has dominated capital raises in Q2 with roughly $1.95 billion raised versus minimal common equity issuance. 

Nearly all proceeds have been deployed directly into Bitcoin purchases.

Bitcoin per 1,000 fully diluted shares reached 2.21x as of May 17, up from 1.95x at the end of 2025. TD Cowen called the trajectory a core validation of Strategy’s financing model, with Bitcoin holdings continuing to outpace share issuance.

$1.5B Convertible Note Repurchase Cleans Up Balance Sheet

The second driver of the target raise was Strategy’s repurchase of roughly $1.5 billion of out-of-the-money convertible notes at an approximately 8% discount to face value.

TD Cowen argued the transaction reduces fully diluted share exposure while improving credit quality and lowering future refinancing risk. The firm called it an important signal of financial flexibility.

Strategy now holds 843,738 BTC—more than 4% of the 21 million Bitcoin supply cap—after acquiring 24,869 BTC for roughly $2.01 billion from May 11 to May 17, the largest single-week purchase this year since a 34,164 BTC buy in April.

$400 Target Implies 140% Upside From Current Levels

TD Cowen’s $400 price target applies a 3x multiple to 2026 BTC Dollar Gain of $15.16 billion, then adds projected year-end Bitcoin holdings of $132.9 billion and subtracts $3.5 billion in debt and $15.5 billion in preferred equity obligations.

MSTR closed at $166.63 on Monday, down roughly 63% from its 52-week high of $455.90, leaving TD Cowen’s target implying more than 140% upside from current levels.

MSTR Breaks Below 20 EMA, Testing Critical Support

Strategy dropped 6% to $165 on Monday as price broke below the critical 20 EMA at $173.64 and is now pressing directly on the 50 EMA at $161.54 and Supertrend at $158.35 cluster.

The golden supply zone at $190–$200 rejected price twice in two weeks. 

Everything now hinges on $158–$162 holding as support. This EMA and Supertrend confluence is the last structural defense before price revisits the $142 demand zone below.

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