MicroStrategy shares slip 8% after its end-of-year Bitcoin buy
MicroStrategy slumped over the last trading day after disclosing its latest Bitcoin purchase, with some market observers raising concern over leverage.
Shares in Michael Saylor’s MicroStrategy (MSTR) fell over 8% after its latest $209 million Bitcoin buy, with some observers starting to share concerns about its “leveraged” play.
MSTR made the purchase just an hour before the trading day began on the Nasdaq stock exchange, which opened at 2:30 pm UTC. Within an hour, its shares fell 5.3% from $318.89 to $302.09.
Despite a partial recovery during the session, it ended the day at $302.96, according to Google Finance data, and then fell another 3.19% in after-hours trading, bringing the price down to $293.59.
According to a filing, MicroStrategy funded the acquisition by selling 592,987 shares during the same week.
The latest Bitcoin purchase marks the eighth consecutive week the business intelligence firm has purchased Bitcoin. Since Oct. 31, MicroStrategy has bought BTC weekly, adding 194,180 BTC to its holdings.
Get to know Godleak
Godleak crypto signal is a service which provide profitable crypto and forex signals. Godleak tried to provide you signals of best crypto channels in the world.
It means that you don’t need to buy individual crypto signal vip channels that have expensive prices. We bought all for you and provide you the signals with bot on telegram without even a second of delay.
Godleak crypto leak service have multiple advantages in comparision with other services:
- Providing signal of +160 best crypto vip channels in the world
- Using high tech bot to forward signals
- Without even a second of delay
- Joining in +160 separated channels on telegram
- 1 month, 3 months , 6 months and yearly plans
- Also we have trial to test our services before you pay for anything
For joining Godleak and get more information about us only need to follow godleak bot on telegram and can have access to our free vip channels. click on link bellow and press start button to see all features
Join for Free
☟☟☟☟☟
https://t.me/Godleakbot
Also you can check the list of available vip signal channels in the bot. by pressing Channels button.
MicroStrategy’s “hyperbitcoinization”
Trading resource The Kobeissi Letter said in a Dec. 30 X post that the markets are concerned about MicroStrategy’s proposed 10 billion increase in authorized shares.
Kobessi said that through a mix of convertible notes and debt issuances, MSTR heavily leveraged itself. The company must issue more debt or equity to continue its Bitcoin buying spree. It added:
“Total share could 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.”
While MSTR price has plunged 20.18% over the past 30 days, it is up 342.15% since Jan. 1.
In a Dec. 30 X post, Hartmann Capital founder Felix Hartmann said that MicroStrategy’s stock price will “eventually implode, but most shorts will time it wrong and blow up betting against BTC and MSTR.”
“Within 5 years, MSTR will first become a top 5 company by market cap before eventually going bankrupt. We’re still early,” Hartmann said, though adding it could also go the other way:
“Counterargument is that in a raging bull he’ll be able to lever up materially more, and repaying $1-4bn of 2027-9 maturities will be peanuts when he sits one $300bn worth of BTC.”
Unchained head of market research Joe Burnett called MicroStrategy’s current strategy “hyperbitcoinization.”
Burnett said that the firm trades at a premium so it can grow its Bitcoin-per-share through leverage.
“Trading at a premium lets them sell shares above NAV, buy more bitcoin, and reduce leverage—further increasing BTC per share. Rinse and repeat,” Burnett said.
On Dec. 23, MicroStrategy was added to the Nasdaq-100 index, meaning it is among Nasdaq’s 100 largest stocks by market capitalization.
MicroStrategy was one of three companies to be added to the index alongside Palantir Technologies Inc. (PLTR) and Axon Enterprise, Inc. (AXON), according to a Dec. 13 statement published by Nasdaq.
