The business software company MicroStrategy (MSTR), which holds a large amount of Bitcoin, saw its stock price plunge more than 8% on Monday, closing at $302.96 per share. Since the company was included in the Nasdaq 100 Index, its stock price has fallen about 30%, and it has collapsed more than 40% from the record high set at the end of November.
This company, originally little known but transformed into the global company with the most Bitcoin, now shows significant short-term peak signs.
One of these signals is the skyrocketing stock price, which reached a peak of $543 per share at the end of November, soaring nearly 8 times in 2024; since the company started buying Bitcoin in August 2020, it has skyrocketed more than 50 times.
Another signal is that founder and executive chairman Michael Saylor has become a regular guest on financial media, podcasts, and social media programs this year.
Michael Saylor continuously promotes the key performance indicator invented by MicroStrategy, the 'Bitcoin Yield,' reminiscent of the internet bubble metrics created at the end of the 1990s, such as page views. MicroStrategy has raised significant funds through extensive stock issuance and convertible bonds, and by the end of 2024, it has 'developed a habit' of hinting at increasing Bitcoin holdings every Sunday before formally submitting regulatory documents on Monday.
Now, several other companies have followed suit. Previously, while Michael Saylor's strategy of turning Bitcoin into corporate reserve assets had been successful for many years, few companies followed suit apart from Tesla, led by Musk, and Block, led by Jack Dorsey; however, this situation changed significantly in 2024, as small medical device manufacturers like Semler Scientific, Japan's Metaplanet, which started with hotel operations, and some Bitcoin miners embraced Michael Saylor's ideas, and every time they announced fundraising and purchasing Bitcoin, they earned Michael Saylor's praise on social media.
However, according to the late economist Herb Stein's description of government budgets and trade deficits, if something cannot continue forever, it will eventually stop. Although MicroStrategy seems to have discovered its positive cycle in 2024, if it cannot be sustained, it will face a bubble, and obviously, this law also applies to MicroStrategy's stock.
After MicroStrategy announced its inclusion in the Nasdaq 100 Index on December 14, when its stock price was about $430, it plunged about 30% in just two weeks.
Looking back further, three weeks earlier, cracks in MicroStrategy's bubble had already appeared, as its stock price reached a new high of about $543 on November 21. Currently, MicroStrategy's stock price is $302.96 per share, having collapsed 45% from its peak in just five weeks.
However, despite the pullback, this stock has still risen over 400% year-to-date, up about 20 times since the company began buying Bitcoin in August 2020.
"Since being included in the Nasdaq 100 Index, it has plummeted about 30%! Is MicroStrategy's 'decline instead of rise' a bubble?" This article was first published on (Blockcast).
