Benchmark Keeps $570 Target on MicroStrategy After STRC Dip

Benchmark Equity Research reaffirmed a Buy rating and a $570 price target on MicroStrategy Inc. (MSTR) after a selloff in the company's STRC perpetual preferred stock. STRC briefly traded below $83 on Thursday and finished the holiday-shortened week near $89. MicroStrategy common shares closed at $112.53 on Friday, down 3.5% for the session. Benchmark's $570 target implies about 406% upside from that close.

Analyst Mark Palmer described STRC as a bitcoin-backed perpetual preferred with a variable dividend rate and wrote that it is “not a stablecoin.” He noted Benchmark's valuation of MicroStrategy's bitcoin treasury at roughly $55 billion, based on more than 847,000 bitcoins held.

Palmer wrote that “Strategy's objective has been to support STRC's trading at a level near $100, not to guarantee it.” He added, “What has happened with STRC is best described not as a depeg – something that was never pegged cannot be depegged – but as a market-driven reset of required yield.”

Benchmark wrote the recent trading reflected a market-driven repricing of required yield rather than a breakdown in STRC's structure and pointed to elevated volumes during the selloff as evidence of active repricing. The note highlighted the security's variable dividend reset framework and its liquidity profile.

The research also noted MicroStrategy's cash reserve at about $1.4 billion, which Benchmark said is intended to support dividend flexibility and treasury management in tighter capital markets. The firm described the recent episodes in STRC and MicroStrategy shares as a stress test of the company's funding model and referenced continued bitcoin-backed balance sheet support and the company's ability to adjust capital structure mechanisms over time.

Benchmark retained its Buy rating and $570 price target on MicroStrategy, citing the company's bitcoin holdings and its capital management framework as the basis for the target.