Benchmark Maintains Strategy Target Price at $570, States STRC is Not a 'Stablecoin'

BlockBeats News, June 22, Benchmark Equity Research reiterated a "Buy" rating on MicroStrategy (MSTR) and maintained a $570 price target, implying a more than 400% upside from the current stock price.

The firm stated that despite the recent sell-off of the company's STRC perpetual preferred stock, which briefly fell below $83, this volatility should be seen as a market repricing rather than a structural risk.

Benchmark analyst Mark Palmer pointed out that STRC is not a stablecoin, nor is it a reflexive asset relying on arbitrage mechanisms to maintain its peg. Instead, it is a perpetual preferred stock instrument backed by MicroStrategy's holdings of over 847,000 bitcoins (approximately $55 billion).

The report stated that the company's current strategy is to maintain STRC around the $100 trading level, but this does not constitute a price commitment or rigid peg. The recent volatility is more reflective of yield expectation adjustments rather than a "de-pegging."

Benchmark also noted that STRC's variable dividend mechanism, liquidity structure, and around $1.4 billion in cash reserves provide the company with capital structure adjustment flexibility during market turbulence.

The firm believes that recent trading is more like a stress test of the financing model rather than a systemic failure, emphasizing that the Bitcoin asset on the balance sheet continues to be a key support for the company.