Summary:
MicroStrategy Inc. shares fell 8.5%, facing a rough start after entering the Nasdaq 100.
37% drop in value since reaching an all-time high last month.
$561 million raised to buy 5,262 Bitcoins, increasing total holdings to 444,262 BTC.
Michael Saylor's latest purchase is his smallest and 12% above current market levels.
Market sentiment reflects growing unease about MicroStrategy's heavy reliance on Bitcoin.
Shares of MicroStrategy Inc. (NASDAQ: MSTR) fell more than 8.5% on Monday, marking a rough debut among the Nasdaq 100. The software company, recognized as a top corporate Bitcoin (BTC) holder, has recently faced a downturn, logging its fifth losing session in six, and experiencing a 37% drop since its all-time high last month.
Why Is MicroStrategy Falling?
On Monday, MicroStrategy revealed it had sold $561 million in common stock to acquire an additional 5,262 Bitcoins at an average price of $106,662 per coin, increasing its total Bitcoin holdings to an impressive 444,262 BTC.
Yet, both the size and timing of this purchase have raised eyebrows among traders and analysts. This latest Bitcoin acquisition is Michael Saylor’s smallest to date, contrasting sharply with his previous bold strategies. The average price paid for this new Bitcoin stash is approximately 12% above current levels, exceeding the record close of $106,151 per Bitcoin on December 17—an unusual move for a company known for buying on dips.
Critics have been vocal. Peter Schiff, a prominent Bitcoin skeptic, remarked on X, "It seems like you are running out of firepower to keep propping up Bitcoin. Plus, not only is this your smallest buy, but the first time your average purchase price has been above the market price on the Monday you disclosed the buy."
A Risky Game Of Leverage
MicroStrategy's deep connection to Bitcoin serves as both a significant asset and a potential vulnerability. With over $41 billion worth of Bitcoin on its balance sheet as of December 2024, the company remains heavily influenced by the volatile movements of the cryptocurrency market. As sentiment shifts, the market's reaction indicates increasing unease regarding MicroStrategy's strategy and future.
"$MSTR continues to look quite heavy," stated the account Markets & Mayhem on X. "The ‘infinite money glitch' isn't really a glitch at all. It's just trying to replace a failing core SaaS business with something that attracts today's high-beta-loving speculators."
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