MSTR sank below $300 in post-market trading on Dec. 30, a concern for the company’s strategy and future momentum. That extended a tough trend for the business intelligence firm, alternately praised and questioned for its aggressive accumulation of Bitcoin.
The stock, which accounts for about a tenth, closed at $302.96, down 8.2 percent in value, and fell to $293.59 in late-hour trading from three percent down. This scenario is after facing scrutiny and questions from some analysts/investors with the current moves of MSTR issuance billions of dollar shares expected to bolster funding for strategizing 42 billion after raising questions with investors amongst analysts on whether or not the strategy in talk harnesses financial sustenance.
MicroStrategy Stock Down 46% Amid Bitcoin Strategy Concerns
MicroStrategy’s stock is 46% off its all-time high of $543 in November. Against year-over-year growth of 342%, this drop rounds out the company’s otherwise extraordinary performance, propelled by its Bitcoin-heavy approach. The firm’s total accumulation recently surpassed 446,400 BTC after acquiring 2,138 BTC in December.
MSTR also briefly surged 402% when it was added to the Nasdaq 100 index on Dec. 23, but since hitting a high in November, the company’s performance has slumped amidst concerns that such a move would not be sustainable in the volatility of a cryptocurrency market.
The firm’s aggressive buys, fronted by Executive Chairman Michael Saylor, have polarized opinion. Hedge fund co-founder Martin Shkreli has emerged arguably as the most tenacious critic of Saylor, once describing him as an “overzealous” Bitcoin apostle. He noted the notable lack of shareholder support for MicroStrategy’s Bitcoin treasury strategy since a Dec. 24 shareholder vote on the subject drew just 0.5% in approval.
Shkreli continued to chime in, adding: “This is the worst vote I’ve ever seen in the history of proxy voting. Market sentiment has flipped, and it’s hard to see the bull case for the price of Bitcoin at this point.
The Bitcoin bloodbath is imminent. When prices start crashing like a rock, don’t say we didn’t warn you.
This entire run-up was fueled by manipulation and fraud, and just as quickly as it rose, it will implode. If you’re deep in crypto, it’s time to take profits—before it’s too…
— Jacob King (@JacobKinge) December 31, 2024
A skepticism also shared by several analysts, including the Kobbeissi Letter and Jacob King-who even goes to the length of referring to MicroStrategy’s operations as a Ponzi scheme-thinks this reliance on debt and equity issuance to fund Bitcoin purchases dilutes shareholder value and increases financial leverage.
Markets appear to be concerned over the potential approval of raising authorized share count by 10 billion.
Total share could would rise from 330 million to 10.33 BILLION if it is approved.
The problem is, it has left the company in a "lose-lose" situation for now. pic.twitter.com/CcNr8Etebj
— The Kobeissi Letter (@KobeissiLetter) December 30, 2024
Not all analysts have turned bearish for the company. In his analysis, Felix Hartmann at Hartmann Capital indicated that the company could make manageable its short-term due to near-zero interest rate level and debt maturities falling between 2027 to 2030 timeframe, Hartmann remains hawkish for the long future prospects of MSTR stating the following: “every btc dip brings doomsayers; every pump resets most premium and Saylor looks like a genius”
My take on Saylor/MSTR: It will eventually implode, but most shorts will time it wrong and blow up betting against BTC and MSTR.
Key points:
• Much of MSTR’s debt is near 0% interest, with maturities spread between 2027–2030, so neither servicing nor re-payment are near-term…
— Felix Hartmann (@FelixOHartmann) December 30, 2024
He further hypothesized that the firm might achieve a key milestone regarding market valuation before the potential setbacks. Hartmann called the ‘Bitcoin 21/21’ target ambitious but achievable under favorable market conditions.
MSTR will likely be in the spotlight of news within both the tech and crypto communities as it faces this turmoil. Whether such a company could deliver among volatile Bitcoin price action and ever-increasing skepticism by investors and analysts had yet to be seen.
