MicroStrategy has witnessed a staggering market capitalization decline over the past four days, the largest in its history. Since November 21, it has shed over 35% of its value, amounting to a loss of more than $30 billion. This has once again brought to the fore discussions regarding its function as a leveraged Bitcoin investment conduit.
The Kobeissi Letter spotlighted this remarkable drop in a post on X on November 26, leading to queries about the firm’s standing as a leveraged Bitcoin investment vehicle. MicroStrategy’s market cap has tumbled by $30 billion, with its stock price (MSTR) nosediving 35% across four trading days, the most significant slump on record as pointed out by the Kobeissi Letter. The decline in the stock mirrored Bitcoin’s correction following its peak of $99,800 on November 22. MSTR further declined by 7.5% on November 27, trading at $354.10.
The Kobeissi Letter disclosed that retail investors have become increasingly engaged in trading MicroStrategy stock, snapping up nearly $100 million worth of MSTR in the past week. On November 22, retail purchasers spent a record $42 million on MSTR stock.
In March, major institutions such as Allianz acquired over 24% of MicroStrategy’s $600 million note offering, indicating continued interest in the company’s Bitcoin-centered strategy.
Despite the recent correction, both Bitcoin and MicroStrategy have registered robust gains over a more extended period. In the past month, Bitcoin has climbed 44%, while MicroStrategy’s stock has soared by over 32%. Year-to-date, Bitcoin’s price has surged 146%, and MicroStrategy’s stock has rocketed by more than 599%, highlighting its leveraged exposure to the cryptocurrency’s performance. MicroStrategy’s $2.6 billion note offering has also stoked investor interest, reaffirming the company’s dedication to its Bitcoin-centric approach.
The Kobeissi Letter underlined the mounting volatility of MSTR, observing that its 35% drop was more than four times Bitcoin’s correction. The report ascribed this to the increased retail interest, sparking apprehensions about MicroStrategy’s role as a Bitcoin proxy.
As Bitcoin nears the $100K mark, MicroStrategy’s dual nature as a business intelligence firm and a Bitcoin-holding entity will continue to be under intense examination.
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