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Shares of MicroStrategy Inc. (NASDAQ:MSTR) fell more than 8.5% on Monday, marking a rough debut for its nascent tenure among the Nasdaq 100.
The software company and the biggest company Bitcoin (CRYPTO: BTC) has struggled of late, posting its fifth losing session in the last six sessions and falling more than 37% from its all-time high last month.
Why is MicroStrategy going down?
On Monday, MicroStrategy announced that it sold $561 million in common stock to buy an additional 5,262 Bitcoins at an average price of $106,662 per coin. This brings the company’s total Bitcoin holdings to a staggering 444,262 BTC.
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However, both the size and timing of that purchase raised eyebrows among traders and analysts.
The last Bitcoin purchase was Michael Saylorit is the smallest so far. It’s a stark contrast to the bold and major acquisitions that have defined its crypto strategy thus far.
The average price paid for the new Bitcoin deposit is about 12% above current levels. Even more telling, the price surpassed the December 17 record close of $106,151 for Bitcoin, an unusual move for a company known for strategically buying dips.
Critics did not hold back. Peter Schiffa well-known Bitcoin skeptic, took a swipe at Saylor at X, saying:
“Looks like you’re running out of firepower to keep supporting Bitcoin. Also, not only is it your smallest buy, but it’s the first time your average buy price has been above the market price on Monday that you disclosed the purchase.”
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Meanwhile, the market reaction reflected a growing uneasiness.
“$MSTR continues to look pretty heavy,” wrote the Markets & Mayhem account on X. “The ‘infinite money bug’ isn’t really a bug. It’s just trying to replace a failed core SaaS business with something that appeals to current ones.” high-beta-loving speculators.”
A risky game of leverage
MicroStrategy’s deep ties to Bitcoin have been both its crown jewel and its Achilles heel. With more than $41 billion in Bitcoin on its balance sheet by December 2024, the company is inextricably linked to the volatile movements of the cryptocurrency market.
