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Actions of MicroStrategy Inc. (NASDAQ:MSTR) fell more than 8.5% on Monday, marking a rocky start to his new term. among the Nasdaq 100.
The software publisher and largest company Bitcoin (CRYPTO: BTC) the holder has struggled of late, recording its fifth losing session in the last six sessions and plunging more than 37% since its all-time high last month.
Why is MicroStrategy falling?
On Monday, MicroStrategy announced that it sold $561 million in common stock to purchase an additional 5,262 Bitcoins at an average price of $106,662 per coin. This brings the company’s total Bitcoin holdings to 444,262 BTC.
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Yet both the scale and timing of this purchase have raised eyebrows among traders and analysts.
The last purchase of Bitcoin was Michael SaylorIt’s the smallest to date. This stands in stark contrast to the bold and expensive acquisitions that have defined its crypto strategy thus far.
The average price paid for the new Bitcoin reserve is approximately 12% higher than current levels. Even more telling, the price surpasses the December 17 closing record of $106,151 per Bitcoin – an unusual move for a company known for strategic dip buying.
The critics did not hold back. Pierre Schiffa well-known Bitcoin skeptic, attacked Saylor on X, saying:
“It appears you are running out of firepower to continue supporting Bitcoin. Additionally, not only is this your smallest purchase, but it is the first time your average purchase price has been above the market price on the Monday you disclosed the purchase.”
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At the same time, market reaction reflected growing unease.
“$MSTR continues to look pretty cumbersome,” wrote the Markets & Mayhem account on failing core SaaS business by something that attracts today’s high beta amateur speculator investors.
A risky game of leverage
MicroStrategy’s deep ties to Bitcoin have been both its crown jewel and its Achilles heel. With over $41 billion worth of Bitcoin on its balance sheet as of December 2024, the company is inextricably linked to the volatile movements of the cryptocurrency market.
