Investors hunting for fintech leaders naturally gravitate toward established heavyweights like Visa or Mastercard. Strategy -- the software provider-turned-Bitcoin treasury company formerly known as MicroStrategy -- is a different story entirely.

And yet, Barclays launched coverage on Strategy stock with an Overweight rating and $130 price target on Wednesday, as part of a broader initiation on the payments and fintech sector.

The price suggests the stock could rise nearly 40% from current levels, where the stock has been beaten down by concerns that Strategy's crypto-buying blueprint is unwinding. Shares were 4.3% lower at $93.14 on Wednesday.

Originally founded as a software provider in 1989, Strategy's legacy business generates negligible revenue today. Rather, its Bitcoin dominates its balance sheet, turning the stock into a popular proxy for investors seeking crypto exposure without direct ownership.

Historically, the core appeal was leverage, as Strategy used debt and equity issuance to buy Bitcoin. This structure amplified the stock's moves, meaning Strategy typically gained more than the underlying crypto during bull runs -- although, in a market downturn, this amplified volatility going the other way.

Barclays asserted Wednesday that the company "has historically been able to deliver high Bitcoin yield," referring to the growth of the Bitcoin backing each share over time.

Therein lies the bullish argument: As long as the company continues to acquire Bitcoin "accretively," Barclays expects Strategy to trade at a premium to its net asset value, or the on-paper value of its holdings.

The problem is that Strategy is barely trading at a premium to its Bitcoin. Its market-to-net asset value, or mNAV, stood at 1.06 on Wednesday. Any value above 1 indicates the stock still trades at a premium to its holdings.

The metric itself is inherently flawed, too. The formula to calculate mNAV uses the par value of the company's debt and preferred stock rather than their actual market value, which has dropped sharply. This means mNAV is artificially inflated, even at current levels.

And while Barclays is relying on Strategy to continue bulking up its crypto holdings, lately the company has been doing the opposite. In May, Strategy disclosed that it had sold 3,588 Bitcoin in the period between June 29 and July 5, generating $216 million.

The proceeds were used to fund the payment of distributions on preferred stock and to replenish Strategy's U.S. dollar reserves, the company said in a securities filing.

Barclays' bullish call comes just days after Strategy unveiled its new financial framework, including provisions for stock buybacks and Bitcoin sales, decisively marking a departure from Chairman Michael Saylor's buy-and-hold mantra.

Management had signaled the pivot in advance. "We will sell Bitcoin when it is advantageous to do so," CEO Phong Le said during Strategy's last earnings call in May, adding that management wouldn't "sit back and just say we will never sell the Bitcoin."

The shift came amid a protracted slump in the price of Strategy's Stretch preferred stock, its primary vehicle for funding Bitcoin purchases. The price of STRC hit a record low last month amid weakening confidence in Strategy's ability to fund its dividend obligations.

If STRC trades at or above its par value of $100, Strategy can easily raise capital for crypto purchases by issuing new shares. However, that funding engine stalls if the stock price drops, as evidenced by STRC's slide to a historic low of $71.25 on June 26.

And although STRC has rebounded some since the start of July, Strategy is clearly under pressure. The company has moved from "one-way capital issuance to active capital management," according to Le, signaling that its rigid identity as a Bitcoin treasury company is no longer sustainable.

Jeff Dorman, chief investment officer at Arca, believes Strategy's "downward spiral" is over for now. Saylor, the company's chief decision maker, "finally did the right thing by alleviating concerns about dividend coverage," Dorman wrote on X last month.

Even so, perceptions of the company and its leadership remain largely unchanged. "Saylor will likely create more unforced errors at some point, " Dorman wrote, such as paying down the debt or making small, symbolic Bitcoin sales, "which kicked all of this off in the first place."

Other buy-side firms similarly welcomed the development, but remained wary. Citi Research analyst Peter Christiansen described Strategy's new approach as "buying more time" for the price of Bitcoin to stabilize.

Against that backdrop, don't expect Barclays' positive endorsement to clear the air for Strategy. Only a Bitcoin rally can do that.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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July 08, 2026 11:09 ET (15:09 GMT)

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