Cantor Cuts Strategy (MSTR) Target 59% But Flags MSCI Risk Over Forced Bitcoin Sales

Cantor Fitzgerald sharply recalibrated its view on Strategy (MSTR), slicing the 12‑month price target to $229 from $560 while keeping an Overweight stance on the Bitcoin accumulator led by Michael Saylor. The reset comes after a six‑month slide of more than 50% in the shares and a Bitcoin drawdown that has tested conviction across the crypto complex.

What actually moved in Cantor’s model is telling. The value assigned to Strategy’s treasury operations fell to $74 per share from $364, and expected capital markets proceeds over the next year dropped to $7.8 billion from $22.5 billion. The firm still describes itself as long‑term constructive on the stock of the company that holds approximately $58 billion in BTC, but it is acknowledging tighter funding conditions and a thinner equity cushion.

The market backdrop hasn’t helped. Strategy closed Friday near $178, per Yahoo Finance, while Bitcoin dipped below $90,000—roughly 30% off its early‑October high above $126,000. That combination tends to compress Strategy’s mNAV and complicate its historical playbook of issuing common stock to add more Bitcoin per share, particularly now that the market cap has slipped below the value of its crypto holdings. Cantor notes this mNAV dynamic has been cyclical, with extremes in 2022’s trough and last year’s peak.

Here’s the critical distinction in Cantor’s note: they see very little reason Strategy would be forced to sell Bitcoin. The company’s growing use of preferred stock—dividends not guaranteed—doesn’t, in their view, create imminent pressure. Strategy recently set aside a $1.44 billion cash reserve designed to cover nearly two years of preferred payouts, and none of its $8.2 billion in convertible debt matures until 2028. Management has acknowledged BTC could be sold under certain conditions, but Cantor doesn’t frame that as the base case. A lower Bitcoin price alone likely won’t halt accumulation.

The one risk Cantor calls “somewhat warranted” is index‑related: potential removal from MSCI’s benchmarks. That’s the overhang worth focusing on. If Strategy were excluded, JPMorgan has estimated as much as $2.8 billion in passive outflows. Index reshuffles can be mechanical and indifferent to valuation, turning liquidity into the short‑term arbiter. For a stock whose narrative is highly reflexive—premium/discount to mNAV, cash raised translating into more BTC, then back into sentiment—forced selling by passive vehicles could temporarily widen dislocations and raise the cost of capital just when the firm wants to lean in.

This is less about technology or balance‑sheet solvency than flows and mandates. If passive ownership is sizable, a deletion creates a window where liquidity providers demand more concession, borrow tightens, and volatility picks up. Some active managers may welcome that spread; others may be constrained by mandate language around “derived crypto exposure.” Either way, the resolution of the MSCI question could reset the bid/ask for Strategy’s equity and, by extension, its ability to scale preferred or common issuance efficiently.

Investors will likely track four signals from here: - MSCI methodology updates and any preliminary index review flags. - The share of passive versus active ownership and borrow costs into rebalancing windows. - The premium/discount to mNAV relative to Bitcoin’s beta, especially if BTC retests prior levels. - The pace of capital formation against Cantor’s revised $7.8 billion expectation.

Cantor’s Overweight rating alongside a drastic target cut reads less like a flip and more like a repricing of the funding curve. If the MSCI outcome proves benign, the long‑term bull case may reassert as cash reserves, distant maturities, and ongoing Bitcoin accumulation rebuild confidence. If not, the flow shock could be finite but disruptive, and it would likely dictate the next leg of Strategy’s cost of capital—and how quickly it can translate equity into additional BTC per share.