TD Cowen analyst Lance Vitanza just cut his price target on Strategy (NASDAQ: MSTR) from $400 to $260. And somehow, that’s still wildly bullish. At a recent trading price of roughly $87 per share, the revised target implies nearly 199% upside, the kind of number that makes you read it twice.

The adjustment came alongside news that Strategy has ramped its USD reserves to $3 billion, a move designed to give the company a financial cushion thick enough to absorb the volatility that comes with being the world’s largest corporate Bitcoin holder.

Why the target dropped, and why it still screams buy

Vitanza maintained his Buy rating on MSTR, signaling that the reduction reflects updated assumptions about Bitcoin’s price trajectory rather than any fundamental shift in Strategy’s playbook.

The math behind the cut is straightforward. If you model a lower Bitcoin price into a company that holds 843,775 BTC, the equity valuation moves accordingly.

The $3 billion cash cushion

Strategy’s decision to bulk up its cash reserves to $3 billion deserves more attention than a footnote. The company got there partly by selling approximately 4.8 million shares, which generated roughly $467 million in proceeds.

Strategy carries approximately $1.76 billion in annualized obligations, including preferred dividends and debt service. A $3 billion cash buffer means the company can cover nearly two years of those commitments without selling a single satoshi.

Notably, Strategy reported no Bitcoin purchases or sales during the period. The 843,775 BTC stockpile remains untouched.

The share dilution is also worth monitoring closely. Selling 4.8 million shares to raise $467 million is a transaction that makes sense when the proceeds fund strategic flexibility. But if the pattern accelerates, it could weigh on per-share metrics over time.