Benchmark reiterates its Buy rating on Strategy, stating that the $1.25 billion Bitcoin authorization is negligible compared to its reserves

According to The Block, Benchmark Equity Research maintains a Buy rating on Strategy and reiterates a target price of $570. This target price still has about a 515% upside compared to Strategy's closing price of $92.68 on Monday.

Analyst Mark Palmer stated in the report that the digital credit capital framework launched by Strategy allows it to actively manage both ends of its capital structure according to market conditions, including repurchasing common and preferred stock when necessary, selling Bitcoin to meet obligations, and pausing additional issuances when the stock price is not at a premium.

Palmer believes that this framework marks a shift for Strategy from previously issuing securities in a one-way manner to actively managing capital in both directions. He stated, "This is a significant positive for shareholders."

The report also pointed out that this framework addresses market concerns about dilution and enhances flexibility through a structured repurchase plan. Palmer also believes that the authorization to sell up to $1.25 billion worth of Bitcoin is negligible compared to Strategy's reserve of approximately 847,000 BTC.