Strategy Shares Drop Over 7% as Bitcoin Pullback Weighs

Strategy Inc shares fell on Friday as investors weighed the impact of a new stock offering against a pullback in Bitcoin prices.

The decline followed the company's latest funding announcement tied to its Bitcoin reserve strategy.

The pullback comes as crypto bulls highlight MSTR's 78% correlation with Bitcoin among large-cap crypto stocks. The move suggests investors may be taking profits after a recent crypto rally.

Strategy Raises $2 Billion, Bitcoin Holdings Back in Profit

Strategy raised $2 billion last week through stock sales, and a 24% surge in Bitcoin pushed its 840,447 BTC holdings back into profit.

In a Form 8-K filed Monday, the company said it sold 18.26 million shares between August 17 and August 23. Strategy used the proceeds to build a $5.1 billion USD reserve, a new dollar cash liquidity pool, and preferred stock buybacks.

The funding puts the trade-off between Bitcoin upside and shareholder dilution back in focus.

Bernstein Bullish on Bitcoin Upside Despite MSTR Dilution Risk

Bernstein recently cut its price target on MSTR to $350 while maintaining a bullish call for Bitcoin to reach $500,000 by 2029.

Its base case sees Bitcoin hitting $125,000 by end-2026 and $150,000 by mid-2027.

That outlook could support MSTR's long-term Bitcoin exposure, even if additional share issuance pressures the stock in the near term.

MSTR Technicals: RSI Shows Overbought Conditions

MSTR currently trades 28.6% above its 20-day simple moving average of $104.78 and 34.7% above its 50-day SMA of $100.02, reflecting a sharp recent rally.

The stock is 5.7% above its 100-day SMA of $127.47 but remains 4.9% below its 200-day SMA of $141.60.

The relative strength index stands at 72.66, putting the stock in overbought territory and suggesting a possible pullback or consolidation after the recent surge.

Key resistance sits at $136.50—a nearby pivot point where selling pressure could emerge.

Key support is at $118.50—a level to watch if the current pullback deepens.

Analysts Remain Bullish on Strategy

The stock holds a consensus Buy rating with an average price target of $228.50.

Recent analyst actions include: Bernstein maintained an Outperform rating on August 26 but cut its target to $350. Canaccord Genuity maintained a Buy on August 25 and raised its target to $175. B. Riley Securities maintained a Buy on August 3 and cut its target to $155.

MSTR shares closed Friday down 7.74% at $126.77.