MicroStrategy Shares Down 46% from November Peak Amid Growing Concerns Over Bitcoin Debt Strategy
2024-12-31
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MicroStrategy (MSTR) shares fell below $300 during after-hours trading on Monday, marking a significant 46% decline from their all-time high in November.
The drop comes amid growing concerns over the company’s ambitious $42 billion funding strategy, which heavily relies on increased debt and equity to finance its aggressive Bitcoin accumulation.
According to Google Finance, MicroStrategy’s stock at $302.96, its lowest since November 8, before sliding another 3% to $293.59 in extended trading.MicroStrategy’s Shares Show Impressive Gains This Year
The sharp decline follows a year of impressive gains, with MSTR up 342% year-to-date, largely driven by Bitcoin’s 121% annual rise and the company’s extensive crypto purchases.
MicroStrategy’s most recent acquisition added 2,138 BTC to its reserves, bringing its total holdings to 446,400 BTC.
Despite this, and the stock’s inclusion in the Nasdaq 100 index on December 23, MSTR has been on a steady decline since reaching a $543 intraday high on November 21.
The company’s “21/21” strategy, announced in October, aims to raise $42 billion over three years by issuing $21 billion in equity and $21 billion in fixed-income securities.
Earlier this month, MicroStrategy proposed increasing its Class A common shares by 10 billion and preferred shares by one billion, a move that has sparked criticism.
The Kobeissi Letter described the proposal as a “lose-lose” scenario, stating that approval would dilute existing shareholders, while rejection would hinder the company’s ability to buy Bitcoin on leverage.
Here's a comparison of vs since November 20th.Bitcoin has traded almost completely flat on a net basis, even after rising as much as +16%.Meanwhile, is down ~36% and continues to widen the gap between the two assets.Why is this happening? — The Kobeissi Letter (@KobeissiLetter) 
MicroStrategy co-founder Michael Saylor, who holds 46.8% of the voting power, will play a key role in the shareholder vote.
Bitcoin’s recent dip to $92,241 has added to investor concerns, fueling the stock’s downturn.
Critics argue that the company’s reliance on leveraged Bitcoin purchases exposes it to heightened risk, with some suggesting that investors now see MSTR as too risky.
However, Felix Hartmann of Hartmann Capital .
He noted that MicroStrategy’s near-zero-interest debt, with maturities extending to 2030, poses no immediate threat.
Hartmann acknowledged that while the company might eventually implode, it could first rise to become one of the top five companies by market capitalization.
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) MicroStrategy to Join Nasdaq 100 Index
It is worth noting that MicroStrategy joined the Nasdaq 100 index on December 23, 2024.
The inclusion places the company among the top 100 largest firms on the Nasdaq by market capitalization, offering indirect Bitcoin exposure to stock investors, including those holding the Invesco QQQ Trust (QQQ), an ETF managing assets worth $322 billion.
As reported, Saylor has also expressed strong support for President-elect Donald Trump’s proposal to establish a strategic Bitcoin reserve.
Detailed in his “Digital Assets Framework” policy, the proposal outlines a roadmap for the United States to foster growth in the digital asset industry, establish clear compliance standards, and ensure defined rights for crypto asset holders and companies.