Analyst warns more pain ahead for Strategy’s stock

Strategy Inc. is once again facing criticism regarding its Bitcoin-laden balance sheet and financing method.

Monness, Crespi, Hardt analyst Gus Galá believes that shares of Strategy Inc. (previously MicroStrategy) may have further declines in store.

Galá reiterated a Sell recommendation and a price target of $175, claiming the stock often trades at a premium due to its Bitcoin index, and may certainly decline if Bitcoin declines.

He also warned that as credit markets turn against the company's debt to fund its ongoing buying run, it could further compress the premium at which the stock regularly trades compared to its actual Bitcoin value, as per reports.

Galá pointed out that Strategy's market cap often trades at a premium to the underlying value of its Bitcoin, which he expects to narrow.

According to him, the skepticism among credit markets regarding the debt strategy for funding Bitcoin purchases persists, as investment-grade ratings for such structures remain unlikely.

"We continue to argue BTC Treasury [companies] are symptomatic of later stage BTC upcycle," Galá wrote research note, as per Barron’s.

The company has gained attention as the largest corporate holder of Bitcoin, with its holdings surpassing 629,000 tokens valued at over $71 billion as of August 21.

The company's method of purchasing Bitcoin via equity and bonds has transformed its stock into a leveraged proxy for Bitcoin: it produced outsized profits during bull runs and large losses during downturns.

Earlier in the week, hedge fund manager Josh Mandell disclosed he had sold his entire stake in Strategy.

Mandell stated he made the decision to sell all his shares because the company sold shares below a value threshold that Executive Chairman Michael Saylor had said they wouldn't.

Strategy's stock has been down over 21% in the last month, and is priced at $335.39 as of writing.

This story was originally reported by TheStreet on Aug 21, 2025, where it first appeared in the MARKETS section. Add TheStreet as a Preferred Source by clicking here.

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