According to Google Finance data, MicroStrategy shares have dropped to ~$353, down 34% from Nov. 21st’s high of ~$535. The decline began with a 15% drop to $453, a 13% reversal from a few hours earlier.
The business intelligence firm, however, revealed that it had accumulated over 55K BTC worth $5.4B between Nov. 18th and Nov. 24th. The purchase brought its total Bitcoin holding to over 386 K, estimated at $21.9B. Bernstein predicted that MicroStrategy’s relentless capital-raising and BTC acquisition efforts would see the company own nearly 4% of the global BTC supply.
MicroStrategy stock records poor performance
WOW.
MicroStrategy stock, $MSTR, just fell a MASSIVE -35% from its peak seen on November 21st.
That's ~$30 BILLION of market cap erased in 4 trading days as #Bitcoin fell ~9% from its high.
This is one $MSTR's largest 4-day drops in history.
What just happened?
(a thread)
— The Kobeissi Letter (@KobeissiLetter) November 26, 2024
MSTR’s five-day poor performance, characterized by a sharp stock value decline, wiped nearly $30B off the company’s market cap in four days, according to Kobeissi. MSTR’s price fell nearly seven times that of Bitcoin, which lost slightly more than 5% over the same five-day period. However, leading Wall Street analysts were revising their price target predictions after the recent MicroStrategy’s massive BTC acquisition.
Analysts Gautam Chhugani (Bernstein) and Mark Palmer (Benchmark) raised their predictions to over $600, describing the company’s strategy as ‘unprecedented’ on Wall Street. TD Cowen analysts estimated that MicroStrategy’s BTC holding could be worth over $100 billion by the end of FY27.
MicroStrategy’s focus on Bitcoin has also raised questions. Critics argue that investors could gain directly from BTC through ETFs instead of investing in the premium-priced MSTR stock.
“We believe those who raise such criticisms are giving short shrift to the shareholder value [MicroStrategy] has been creating through its treasury operations, i.e., its repeated tapping of the capital markets to raise proceeds to fuel the addition of bitcoins to its sizable holdings.”
–Mark Palmer
As MicroStrategy continues to build what some analysts call a ‘Bitcoin Bank,’ the company’s boss, Michael Saylor, predicted that Bitcoin may rise to $13 million by 2045. He added that the company’s total BTC holding could potentially increase in value to reach trillions.
Novogratz warns of a looming Bitcoin correction mostly affecting BTC-related stocks
MSTR’s exponential rise has caused anxiety among some investors, and short-sellers have put it on their radar. Mike Novogratz, Galaxy Digital CEO, expected a sharper correction in Bitcoin-related stocks like MSTR than in Bitcoin itself.
A Citron Research spokesperson added that while CR was bullish on MicroStrategy’s stock, it only opened a short position on MSTR as a hedge because it considered the shares overheated.
On the other hand, Michael Saylor’s firm revealed that the once-software company now makes over $500 million per day. Putting things into perspective, MicroStrategy’s stock gained 97% in the last month against Bitcoin’s 47%. The stock also gained 515% YTD, while Bitcoin rose 122% over the same period. Saylor claimed that MicroStrategy was likely the most profitable company in the U.S. right now.
Saylor also criticized Warren Buffet for holding over $325 billion in cash at Berkshire Hathaway instead of investing it in Bitcoin.
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