StoneX lifts Strive price target 34% as new stock offering bolsters bitcoin strategy

StoneX has raised its price target for bitcoin treasury company Strive Strive, Inc. (ASST) to $43 from $32, citing an improved outlook for the firm's bitcoin Bitcoin (BTC) accumulation strategy.

In a Monday research report, StoneX Senior Equity Research Analyst Mark Palmer reiterated a Buy rating on the stock. Strive's ASST shares lost 9.15% to close at $26.32 on Monday, putting the price target 63% above their current prices.

On Oct. 20, Strive announced that it raised $630 million in gross proceeds after closing an upsized initial public offering of 7 million shares of its 15% SATS preferred stock. Strive's traditional warrants also expired during the same week, according to its filing.

"Taken together, we view the two events as a clean reset of the company's capital structure that underlines its durable, all-preferred bitcoin treasury model," Palmer said.

The analyst noted that the company has spent the past year proving that it can finance bitcoin acquisitions entirely with perpetual preferred equity, "with its SATA preferreds doing the heavy lifting." 

"Now, with the initial public offering of SATS, the company is showing that it can run two preferreds side by side, each built for a different kind of income investor," he added.

SATS carries a 15% annual dividend, and the company has set aside enough to cover the first 18 months of payments. SATA, meanwhile, is the firm's earlier variable-rate Series A perpetual preferred stock.

Palmer also said that SATA holders should view the introduction of SATS as a positive. "Because SATS sits beneath SATA in terms of priority, every dollar it raises adds assets without adding claims ahead of the senior preferreds," the analyst added.

Separately, Strive announced Monday that it purchased 6,182 BTC between Oct. 17 and Oct. 23, bringing its total holdings to 43,000 BTC. That ranked it fourth among public corporate bitcoin holders, according to Bitcointreasuries data.