MicroStrategy (MSTR) Its shares fell below $300 in after-hours trading on Monday, marking a significant 46% decline from its November peak.
MicroStrategy Shares Drop Below $300 Amid Investors Concerns About Bitcoin Strategy
The drop comes as the company faces scrutiny over its plan to raise billions of dollars to fund its aggressive Bitcoin buying strategy.
Shares of MicroStrategy fell 8.2% to $302.96 on Monday, their lowest closing price since Nov. 8, according to Google Finance data. It fell another 3% to $293.59 in after-hours trading.
Despite a 342% year-to-date gain supported by Bitcoin’s 121% annual price increase, MSTR has been in decline since reaching an intraday high of $543 on November 21.
Bitcoin Holdings and Inclusion in Nasdaq
MicroStrategy continues to expand its Bitcoin holdings, purchasing 2,138 BTC last week, bringing its total to 446,400 BTC. Additionally, MSTR was included in the Nasdaq 100 index on December 23, a move some hope will stabilize investor confidence.
However, these developments have not alleviated concerns about the company’s financial strategies.
Financing Strategy Sparks Controversy
The “21/21” plan, which the company announced in October, aims to raise $42 billion over three years to support Bitcoin purchases. This includes the issuance of $21 billion in new equity capital and $21 billion in fixed income securities.
Earlier this month, MicroStrategy offered to increase its Class A common shares by 10 billion and its preferred shares by 1 billion. The offer sparked mixed reactions, with critics warning of shareholder dilution.
LVRG Research director Nick Ruck highlighted the risks:
“Existing shareholders are diluted when the company buys more BTC, but if it doesn’t it could signal that the company is stalling on a key part of its value proposition.
This puts MSTR in dangerous territory, especially as Bitcoin’s recent rally potentially plateaus.”
*This is not investment advice.
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Source: https://www.bitcoinsistemi.com/microstrategy-hisseleri-zirve-seviyelerden-yuzde-46-dustu-bitcoindeki-dususte-etkisi-var-mi-iste-detaylar/
