By
Temitope Olatunji
April 26th, 2024
MicroStrategy saw its shares plummet to their lowest level for more than two years after a recent BTC filing.
Shares of MicroStrategy Inc (NASDAQ: MSTR) recently hit their lowest level since August 2020 following its first-ever Bitcoin sale. MicroStrategy’s stock dropped 1.1% to $136.63 Thursday and is at a 75% drawdown year-to-date (YTD).
In a recent filing, the cloud-based business intelligence company disclosed that it sold 704 BTC on December 22nd for $11.8 million. According to MicroStrategy, it sold the Bitcoin for tax purposes but re-purchased 810 more two days later. Altogether, the cloud computing company said it bought roughly 2,395 Bitcoin between November and December 21st. This acquisition took place through MicroStrategy’s subsidiary MacroStrategy, costing approximately $42.8 million in cash.
Miller Tabak + Co chief market strategist Matt Maley weighed in on the MicroStrategy BTC development. According to him, the company’s reputation as a devoted token buyer amid crypto winter is worrisome to investors. As Maley put it:
“Investors seem to be concerned about their announcement that they’re still a net buyer of crypto. Most people have been hoping that MSTR might scale back their holdings after Michael Saylor stepped down as CEO. This news means they don’t seem to want to do that anytime soon.”
Jefferies analyst Brent Thill also suggested that MicroStrategy may be overleveraged with its current Bitcoin position. According to Thill:
“Given MicroStrategy’s $2.4 billion in leverage, we believe the company may have too much leverage for Bitcoin and could face some liquidity risk.”
As of December 27th, MicroStrategy held around 132,500 Bitcoin worth more than $4 billion. The digital-servicing company paid an average purchase price of $30,397 per token.
MicroStrategy Stock Lowest Level Comes After Prosperous 2020/2021
During the pandemic, MicroStrategy became widely known for its BTC acquisitions, primarily led by co-founder and former CEO Michael Saylor. Although Saylor stepped down as CEO to take on the role of executive chairman earlier this year, he still leads MicroStrategy’s Bitcoin strategy. The company’s stock traded at roughly $120 before its first BTC purchases in 2020 and hit an all-time high of $1,315 in early 2021.
The latest lowest level of MicroStrategy stock reflects the severity of the crypto winter that has gripped an underwhelming year. However, despite its recent BTC selloff, many crypto devotees still believed that Bitcoin could end the year on a promising note.
Lightning Network Enterprise Plugins
In other recent MicroStrategy news, the company plans to launch enterprise plugins on Lightning Network next year. According to Saylor, the delays associated with credit card usage for such transactions would not affect the network’s speed.
Speaking at a Twitter Spaces event, Saylor also disclosed that MicroStrategy was working to introduce new services. These include marketing solutions, cybersecurity, and e-commerce that would benefit enterprise users. According to Saylor, MicroStrategy already has teams concurrently developing the different products of its agenda. The cloud-based company intends to unveil these products in the first quarter of next year and launch them sometime later.