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Cryptopolitan 2024-12-31 05:08:01

MicroStrategy shares drop 8% after year-end Bitcoin buy, raising concerns over ‘leveraged’ strategy

MicroStrategy shares plunged more than 8% following the recent $209 million purchase of Bitcoin. Investors worry that the company will take on too much debt for these purchases. The Bitcoin purchase happened just an hour before the Nasdaq opened at 2:30 pm UTC. In that hour, MicroStrategy’s stock fell 5.3% from $318.89 to $302.09. Source: Google Finance Some stocks recovered during the day but closed at $302.96. According to Google Finance data , the shares then fell another 3.19%, ending at $293.59. Concern is growing about MicroStrategy’s plan to raise its number of authorized shares According to the recent filing, the company disclosed its sale of 592,987 to raise funds for Bitcoin purchases. It’s the eighth consecutive week that MicroStrategy has bought Bitcoin. According to the firm, it has spent 194,180 BTC since October 31, bringing the total amount to 2,093,180 BTC. There is growing concern about MicroStrategy’s plan to raise its number of authorized shares by $10 billion. In a December 30 X post, the Kobeissi Letter shared that the market was uneasy with this move. Something doesn't add up here: MicroStrategy, $MSTR , has been known as the most popular "levered" #Bitcoin play of the year. Meanwhile, over the last month Bitcoin has gained +2% while $MSTR is currently down nearly -50%. What is happening? Let us explain. (a thread) — The Kobeissi Letter (@KobeissiLetter) December 30, 2024 MicroStrategy has also borrowed a lot of money from convertible notes and debt issuances, explains Kobeissi. The company may need to borrow even more money or issue even more shares to keep buying Bitcoin. If the proposal is approved, the total number of shares could rise from 330 million to 10.33 billion. This is a difficult situation for the company, with risks on both sides. Land a High-Paying Web3 Job in 90 Days: The Ultimate Roadmap

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