Benchmark reiterates $570 target on Strategy after STRC selloff, says preferred stock is 'not a stablecoin'

Benchmark Equity Research reiterated its Buy rating on Strategy (MSTR), maintaining a $570 price target despite a recent selloff in the company’s STRC perpetual preferred stock that saw it briefly fall below $83 on Thursday before closing near $89 in a holiday-shortened trading week.

Strategy shares closed at $112.53 on Friday, down 3.5% on the session, according to The Block's MSTR price page. Benchmark's $570 target implies approximately 406% upside from that closing price.

Benchmark analyst Mark Palmer demystified comparisons between STRC’s trading and the 2022 collapse of TerraUSD and Luna, arguing the instruments operate under fundamentally different structures. STRC, he said, is "not a stablecoin" or an asset backed by a reflexive token system reliant on arbitrage mechanisms.

He described STRC as a perpetual preferred stock with a variable dividend rate backed by Strategy’s treasury of over 847,000 BTC, currently valued at roughly $55 billion.

“Strategy’s objective has been to support STRC’s trading at a level near $100, not to guarantee it,” Palmer wrote in the note. “In our view, what has happened with STRC is best described not as a depeg — something that was never pegged cannot be depegged — but as a market-driven reset of required yield.”

Benchmark said several aspects of STRC’s structure are receiving insufficient attention, including its variable dividend reset framework, liquidity profile, and the company’s expanding cash reserve, which now stands at roughly $1.4 billion and is intended to support dividend flexibility and treasury management during periods of tighter capital markets.

The firm added that recent trading activity, including elevated volumes during the selloff, points to active repricing rather than structural deterioration.

According to the note, Benchmark views the recent selloff in STRC and Strategy’s common shares as a stress test of the funding model rather than evidence of a breakdown, pointing to continued bitcoin-backed balance sheet support and the firm’s ability to adjust capital structure mechanisms over time.