TechFlow reported on December 30 that CoinDesk reported that analysts explained the recent stock price trend of MicroStrategy (MSTR) through Soros' Theory of Reflexivity. The theory holds that there is a two-way interaction between investor expectations and prices: investors' optimism drives up stock prices, and rising stock prices allow companies to raise funds at a lower cost, and improved performance further pushes up stock prices, forming a virtuous cycle. However, when this cycle is broken, price adjustments may exceed market expectations.
MicroStrategy (MSTR) stock price continued to fall after being included in the Nasdaq 100 Index, once falling to the $300 mark, down nearly 45% from its historical high of $543 at the end of November, and down about 30% from $430 after the announcement of the inclusion of the Nasdaq 100 on December 14. Analysts pointed out that multiple market signals suggest that MSTR may have formed a short-term top, including: the company's stock price has soared nearly 8 times this year, founder Michael Saylor frequently appeared and promoted the new "Bitcoin yield" indicator, and many companies began to emulate its Bitcoin reserve strategy.
Despite the recent sharp pullback, MSTR's long-term performance remains impressive. The stock is still up more than 400% this year and has risen 20 times since the Bitcoin reserve strategy began in August 2020. Most analysts believe that MSTR has experienced similar pullbacks many times in the past three years, but they all ended up rising.