In This Article:
What Happened?
Shares of business analytics software company MicroStrategy (NASDAQ:MSTR) fell 7.7% in the morning session after the company sold 592,987 shares for approximately $209 million. The company used the proceeds to acquire approximately 2,138 bitcoins. This acquisition puts MSTR's total Bitcoin holding at approximately 446,400 bitcoins for an average purchase price of roughly $62,428 per bitcoin. The purchase size is modest compared to previous announcements amid a downturn in the crypto space. Bitcoin, the largest cryptocurrency by market value, recently dropped below $92,000—a decline of over 10% from its all-time high earlier in the month.
The shares closed the day at $302.78, down 8.3% from previous close.
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What The Market Is Telling Us
MicroStrategy’s shares are extremely volatile and have had 97 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 6.5% after stocks with exposure to the crypto space declined as momentum in the crypto market weakened following a strong rally that began in the weeks leading up to the November 2024 elections. Investors had hoped for more favorable regulation under a new administration. Although the incoming Trump administration's victory was initially viewed positively, the market now appears to be searching for new catalysts to sustain its momentum.
Additionally, profit-taking by investors may be contributing to the downturn. Notably, Bitcoin—the largest cryptocurrency by market capitalization—fell by more than 10% after reaching a record high of $106,000 on December 16, 2024. On December 23, 2024, MicroStrategy, often regarded as a Bitcoin proxy due to its substantial cryptocurrency holdings, announced the acquisition of 5,262 bitcoins at an average price of $106,662.
MicroStrategy is up 339% since the beginning of the year, but at $300.95 per share, it is still trading 36.5% below its 52-week high of $473.83 from November 2024. Investors who bought $1,000 worth of MicroStrategy’s shares 5 years ago would now be looking at an investment worth $21,192.
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