Strategy initiated with a Neutral at Monness Crespi

Monness Crespi initiated coverage of Strategy (MSTR) with a Neutral rating. The firm, which sees fair value of $200/share, believes ongoing adoption of BTC by wider investor classes makes it likelier to exhibit declining implied volatility over time, increasingly Strategy’s form of value add, the analyst says in a research note. The firm adds that the augmented implied volatility Strategy delivers on BTC holdings will become harder to sustain, effectively limiting the company to equity issuance/more expensive capital. Monness also questions whether saturation of convertibles market with Strategy notes through early March 2025 could possibly limit appetite for further issuances in the near-term.