🌎 MicroStrategy’s Stock Plummets Amid Bitcoin Concerns

MicroStrategy’s Stock Price Declines Amidst Growing Concerns Over Debt and Bitcoin Strategy

MicroStrategy’s stock price (MSTR) has experienced a significant decline, falling by 46% from its all-time high in November. The company’s shares dropped to a low of $302.96 on December 30, resulting in an 8.2% loss in stock value. Late-hour trading saw a further decrease of 3% to $293.59.

Debt Structure and Financing Strategy

MicroStrategy’s debt structure reveals a total debt of $7.26 billion, with an average interest rate of 0.476%. Key maturities include $3 billion due in 2029 at 0% interest, highlighting the company’s long-term financing strategy.

Despite the decline, MicroStrategy has continued to accumulate Bitcoin (BTC), acquiring 2,138 BTC last week and increasing its total holdings to 446,400 BTC. The company’s shares were also added to the Nasdaq 100 index on December 23, resulting in a 402% surge in stock price.

Criticism and Concerns Over Bitcoin Strategy

MicroStrategy’s Bitcoin treasury strategy has faced criticism from investors, including Martin Shkreli, who co-founded Elea Capital. Shkreli called Michael Saylor, MicroStrategy’s CEO, an “overzealous” and “not credible” supporter of BTC, stating that market sentiment has changed and it is now “a little bit hard to see the bull case” for the price of BTC.

Some analysts have also expressed concerns that MicroStrategy operates like a Ponzi scheme, relying heavily on debt and equity issuance to buy BTC, which dilutes shareholder value.

Investor Sentiment and Market Concerns

Markets appear to be concerned over the potential approval of raising authorized share count by 10 billion, which could increase the total share count from 330 million to 10.33 billion. This has left the company in a “lose-lose” situation, according to The Kobeissi Letter.

Investors are divided on the impact of the shareholder vote on MicroStrategy’s ambitious ‘Bitcoin 21/21’ goal. While some, like Felix Hartmann of Hartmann Capital, are optimistic about the company’s short-term debt commitment, others are more pessimistic about the company’s future prospects.