Strategy Shares Face Mounting Pressure Ahead of Critical Index Review

Strategy US5949724083

While the company Strategy continues to execute its aggressive Bitcoin acquisition strategy, its equity performance tells a starkly different story. The stock is trading near its annual low, under significant selling pressure as analysts cut price targets and highlight substantial risks looming in January. A pivotal index provider decision with billion-dollar implications is at the heart of the current investor anxiety.

Strategy’s share price remains under duress, currently hovering around $155, close to its 52-week low. The stock has declined nearly 50% year-to-date and sits approximately 60% below its high from the past twelve months. Its recovery from a mid-December low has been muted.

Operationally, management’s commitment to Bitcoin is unwavering. In the week ending December 28, the company purchased an additional 1,229 Bitcoin for approximately $108.8 million, paying an average of $88,568 per coin. This brings Strategy’s total holdings to 672,497 Bitcoin, cementing its status as the largest publicly traded owner of the cryptocurrency.

These acquisitions are funded through ongoing capital raises. The issuance of new shares dilutes existing equity, a practice viewed with increasing skepticism by the market and contributing to downward pressure on the stock.

Analyst Adjustments and Strategic Scrutiny

In response to growing uncertainty, analysts are revising their models. Citigroup significantly reduced its price target from $485 to $325, though it maintained a formal "Buy" rating. The bank cited a "strategic pause" in the company's aggressive use of debt financing as the reason.

Recently, Strategy has built a cash position of roughly $2.19 billion instead of deploying every available dollar into Bitcoin immediately. Market observers interpret this as an effort to bolster liquidity for potential market turbulence and maintain flexibility should volatility intensify.

Despite these precautionary measures, the stock is among the weakest performers in the Nasdaq-100 for 2025. A drop of over 70% from its 2024 highs indicates the share price has decoupled from Bitcoin's price. This is due to a shrinking premium on the net asset value (NAV) of its Bitcoin portfolio; investors are less willing to pay a markup over the underlying coin holdings.

Key Data Points:
* Total Bitcoin Holdings: 672,497
* Average Acquisition Cost: Approximately $75,000 per BTC
* Recent Purchase: 1,229 BTC for ~$108.8 million
* Funding Method: Ongoing equity offerings, causing dilution
* Average Analyst Target: $325, implying significant theoretical upside

Despite recent share price weakness, the Bitcoin portfolio remains profitable based on its average cost. However, skepticism is growing over whether a sustainable model can be built that consistently offsets core operational losses with perpetual share issuance.

The Looming Threat of an MSCI Exclusion

Adding substantial pressure is an impending decision from index provider MSCI. A potential re-evaluation scheduled for January 15, 2026, could see Strategy removed from major US indices. JPMorgan estimates this could force passive funds to sell up to $8 billion worth of shares.

Forecasts on the prediction platform Polymarket assign a probability of over 75% to such a delisting. In this context, many investors are reducing their positions, even as the company continues to accumulate Bitcoin—a traditionally bullish signal for the cryptocurrency.

The discrepancy is clear: While Bitcoin trades above Strategy's average cost basis, albeit with volatility, the stock is reacting with disproportionate sensitivity to potential index effects and persistent share dilution.

Historically, Strategy has acted counter-cyclically, using crypto market weakness to make large purchases. This pattern continues, but now under the added shadow of potential forced selling by index funds.

A Pivotal January on the Horizon

The coming weeks present a clear tension. From a technical analysis perspective, the $155 zone remains a critical level; a break below could trigger further sell orders. The Relative Strength Index (RSI) above 80 signals an overbought yet highly volatile environment.

Fundamentally, two narratives are colliding. On one hand, the average analyst price target of $325 suggests substantial theoretical upside. On the other, short-term fears of an MSCI exclusion and its associated forced selling currently dominate.

CEO Michael Saylor and his team remain steadfast in their Bitcoin-focused strategy, pointing to historic outperformance versus traditional asset classes. Whether this argument holds in January depends primarily on two factors: the trajectory of Bitcoin’s price around the turn of the year and the concrete decision from index providers on January 15, 2026.