Strategy (NASDAQ: MSTR) common shareholders may still absorb a dilution drag even after TD Cowen improved its bitcoin price assumptions, according to a client research note the firm issued on October 8, 2026.
Analysts Lance Vitanza and Jonnathan Navarrete raised the bank’s bitcoin path while leaving the $260 price target on Strategy (MSTR) unchanged and keeping a Buy rating.
A stronger bitcoin trajectory should support the company’s earnings power, they argued, but share issuance, preferred claims, and cash set aside for other uses are likely to limit how much of that improvement reaches ordinary equity.
The note treats capital-structure growth as the offsetting force.
Expanding the stack, and the dilution that accompanies it, reduces the per-share benefit of a larger bitcoin balance.
A bigger treasury does not, on its own, produce a matching gain for common holders.
Strategy has raised money both to buy bitcoin and to meet other obligations.
Repurchases of preferred stock and the rebuilding of cash reserves can pull capital away from fresh coin purchases, so less of each raise shows up as incremental bitcoin per common share.
Senior claims matter as well. Debt and preferred securities, including the STRC, STRF, and STRD series, rank ahead of common stock.
Once those claims are subtracted, the bitcoin effectively backing each MSTR share has been less robust than the headline holding suggests.
Strategy recently held about 848,000 bitcoin, with roughly $4.5 billion of unrealized gains.
Its market value relative to net assets had recovered to about one times net asset value after falling as low as 0.63 times in June, a period when the shares struggled to clear $100 from late June into mid-August.
The stock still slipped about 2.5 percent to roughly $150 around the note and remained down nearly 5 percent for the year.
That trading action sits alongside an unchanged equity target despite a higher bitcoin call, which is the practical expression of the dilution argument.
TD Cowen’s revised model puts bitcoin near $109,000 at the end of 2026 and around $280,000 by 2029. The year-end figure reverses a September cut that had taken the 2026 call to $97,500 after price weakness.
The firm attributed the rebound in its forecast to a third quarter that closed near $76,000 and beat earlier model assumptions.
Longer-range math from Vitanza rests on steady annual appreciation in a roughly 20 to 30 percent range.
The updated path is more constructive than some outside scenarios, including a fourth-quarter base case from QCP Capital of $80,000 to $90,000.
Spot bitcoin was near $81,300 at the time and still down about 9 percent year to date, so reaching the year-end call would require a strong final quarter.
The firm has also said well-run bitcoin treasury companies could outperform spot holdings by about 50 percent, provided capital raising stays disciplined.
For Strategy specifically, the unchanged $260 target implies that issuance and senior claims currently cancel much of the lift from a higher bitcoin price.
Investors comparing the stock with direct coin exposure are therefore left watching fourth-quarter bitcoin performance, the pace of new share and preferred issuance, and whether reserve building continues to divert cash from immediate purchases.