Strive Boosts Bitcoin Holdings, TD Cowen Raises Price Target
Investment bank TD Cowen has significantly increased its price target for Strive (NYSE: ASST), raising it from $44 to $56, a 27% jump. The upward revision is attributed to the company’s aggressive pace of Bitcoin acquisitions, which has far exceeded the firm’s expectations for the fourth quarter.
Strive’s Bitcoin reserves have surged from approximately 28,000 at the end of September to 35,595. At current market prices, this holdings are valued at roughly $2.9 billion. The addition of nearly 7,600 Bitcoin in just the past two weeks surpasses TD Cowen’s initial fourth-quarter acquisition forecast of 4,750 Bitcoin.
These substantial purchases include an announcement on October 13th of the acquisition of 3,311 Bitcoin, valued at approximately $280 million, marking the largest single purchase since January. The following day, October 14th, another SEC 8-K filing confirmed the purchase of an additional 2,822 Bitcoin, worth around $235 million.
With this increased stake, Strive has become the fourth-largest Bitcoin holder among publicly traded U.S. companies. Data from Bitcointreasuries.net indicates that its holdings now surpass those of MARA Holdings, which publicly reports 35,577 Bitcoin. Michael Saylor, a prominent Bitcoin advocate, has previously lauded Strive’s rapid accumulation strategy on the X platform.
However, this rapid accumulation has come at the cost of equity dilution. A TD Cowen report highlighted that Strive’s significant exercise of warrants priced at $27 has led to a substantial increase in its outstanding common shares, exerting downward pressure on the stock price. The report stated, “Despite rapid BTC accumulation, the substantial increase in shares related to warrant exercises has depressed BTC Yield.”
The market reacted to this dilution, with ASST’s stock price falling 6.6% on Friday to close at $23.96. Despite this dip, the stock has still seen a year-to-date gain of over 38%.
Analysts suggest that some investors may have sold shares immediately after exercising their warrants. However, with all $27 warrants now fully exercised, this dilutionary pressure is expected to ease in the future.
Strive is also pursuing another capital-raising initiative: expanding its SATS preferred stock offering to 7 million shares, priced at $90 per share, aiming to raise $630 million. According to a GlobeNewswire announcement, this offering is expected to close on October 20th.
The company plans to retain a portion of these funds to cover dividend payments for the next 18 months. The remaining capital will be allocated to further Bitcoin acquisitions. Crucially, as this is a preferred stock offering rather than common stock, it will not further dilute the holdings of existing shareholders.
TD Cowen views this move positively, anticipating that upon completion of the preferred stock offering, Strive will have a stable source of funding to continue acquiring Bitcoin without relying on warrant exercises or common stock issuances. This marks a significant shift for Strive, moving from an “equity-diluting accumulation” strategy to a more “structurally sound approach” to increasing its Bitcoin reserves.
