MicroStrategy Shares Plunge 44% from All-Time High

On December 30, MicroStrategy’s stock closed at $302.96, marking a 44% decline from its all-time high of $543.

Since the beginning of the year, the company’s shares have surged by 379.7%, including a 79.7% rise in the last quarter. This coincided with an aggressive Bitcoin accumulation strategy during a period when the cryptocurrency’s value increased by 121% annually.

MicroStrategy’s latest acquisition of digital gold occurred between December 23 and 29. The company added 2,138 BTC to its holdings for approximately $209 million at an average price of about $97,837 per coin, bringing its total assets to 446,400 BTC.

On December 23, MicroStrategy shares were included in the Nasdaq-100 index.

The positive trend reversed on November 21, when media highlighted that MSTR’s stock had outpaced Bitcoin’s performance fivefold since the start of the year.

The Kobeissi Letter linked the stock sell-off to concerns over a proposal to increase the number of shares as part of the “21/21 Plan,” which would expand the company’s ability to purchase digital gold.

If the plan is approved, bears will say that this is a highly dilutive move for existing shareholders.

However, if it is not approved, then MicroStrategy will be unable to continue buying #Bitcoin on leverage.

Buying Bitcoin is obviously an integral part of $MSTR‘s strategy. pic.twitter.com/D6qcb6fNoG

— The Kobeissi Letter (@KobeissiLetter) December 30, 2024

“If the plan is approved, bears will say that this is a dilution of existing shareholders’ stakes. If it is rejected, MicroStrategy will not be able to continue purchases using leverage,” the statement reads.

Felix Hartmann, founder of Hartmann Capital, noted that the company’s debt carries an interest rate of approximately 0% and matures between 2027 and 2030, posing no immediate concern.

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

“Every Bitcoin drop is accompanied by loud proclamations of impending doom, while every price rise elevates MSTR’s stock premium and turns [company founder Michael] Saylor into a genius,” he pointed out.

Bloomberg has expressed doubts about the long-term viability of the strategy of purchasing digital gold through debt financing.

Previously, BitMEX analysts deemed it “extremely unlikely” that MicroStrategy would liquidate its Bitcoin reserves due to market conditions. According to their assessment, the asset would need to plummet to $15,000 for this to occur.