Strategy Shift from Bitcoin Focus, Multiple Securities Firms Evaluate Mizuho

Support for Cash Accumulation

Major U.S. securities firms TD Cowen and Benchmark have evaluated the company's decision to shift its fundraising strategy from a unilateral Bitcoin purchasing strategy to cash accumulation, following the Q2 earnings presentation of publicly listed companies yesterday.

Chairman Michael Saylor stated during the earnings call, "I don't think we will allocate 100% to Bitcoin going forward. It will likely be a combination of Bitcoin and cash." He also mentioned, "The best way to buy more Bitcoin might be not to buy more Bitcoin," indicating that adjusting the ratio dynamically could lead to long-term accumulation of Bitcoin.

The strategy positions this adjustment as "dynamic capital management," directing approximately $17 billion raised year-to-date not entirely towards Bitcoin purchases as before, but towards increasing cash reserves and debt reduction.

On the other hand, the management has not announced a permanent halt to BTC purchases, leaving open the possibility of expanding the purchase pace depending on market conditions.

TD Cowen analyst Lance Vitale pointed out that the most noteworthy aspect of the earnings call was the management's focus on the permanent preferred stock "STRC." The management repeatedly described the recovery of STRC's face value as a core objective, stating that although the security experienced temporary price fluctuations, demand from institutional investors is expanding.

Benchmark's Mark Palmer shared a similar view, analyzing that most of the 90-minute earnings call was spent by Saylor and others focusing on the single goal of recovering STRC's face value. According to Palmer, Saylor concentrated discussions on bringing STRC back to the $99-$100 price range to become the main axis of fundraising, dismissing other points as distractions.

Meanwhile, Mizuho's analysts evaluated that the strategy is "weathering the storm" despite a significant drop in Bitcoin prices during the quarter.

Expansion of Institutional Investor Holdings

Both TD Cowen and Benchmark analyzed that the institutional investor holding ratio of STRC rose from 22% in March to about 29%, with institutional holdings increasing from $1.1 billion to $3.1 billion. Vitale noted that the average holding amount has doubled to about $3.5 million, positioning this movement not merely as a defensive measure for STRC alone, but as an effort supporting the reliability, liquidity, and scalability of the entire credit product ecosystem envisioned by the strategy.

While Benchmark lowered its target stock price, TD Cowen maintained it. Benchmark cited the downward revision of Bitcoin price assumptions for the end of 2026 from $125,000 to $100,000 as the basis for the downgrade.

According to Palmer, STRC temporarily fell to around $70 on June 26, which led various securities firms to lower collateral ratios or withdraw credit lines.

The strategy executed a $25 million share buyback last week, leaving a remaining buyback limit of $975 million.

Earnings Details

The Q2 earnings announced yesterday turned from a net profit of $10 billion in the same period last year to a net loss of $8.2 billion. The primary reason is that Bitcoin prices dropped over 40% compared to the same period last year, leading to increased unrealized losses on holdings.

Bitcoin holdings increased by 11% during the quarter, but purchases were halted for five weeks, with the latest 8-K document reporting holdings of 843,775 BTC. Year-to-date, approximately 175,000 BTC were purchased, while sales were limited to 3,620 BTC.

CEO Fon Lee revealed that during the quarter, convertible bonds were reduced by 18% to $6.7 billion, and cash reserves were increased by 12% to $2.4 billion. Cash reserves currently reach $3.75 billion, equivalent to about two years of preferred stock dividends and interest payments.