30s Summary
MicroStrategy’s stock experienced a double-digit loss, finishing the day down 16.2%, despite Bitcoin surging to a new record. Citron Research’s Andrew Left has started to short MicroStrategy’s stock, citing its detachment from Bitcoin fundamentals. Despite its recent dip, the stock has allowed MicroStrategy to raise capital and buy more Bitcoin. Jonathan Weil of WSJ suggests buying Bitcoin directly, rather than betting on MicroStrategy’s stock.
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We saw a brief pause in one of the most impressive rises in stock ever on Thursday. Bitcoin Development Company MicroStrategy’s stock took a double-digit percentage loss, even as the price of Bitcoin surged to a new record, almost hitting $100,000.
MicroStrategy’s stock was down by over 20% at one point, finishing the day down 16.2%. But this is just a small blip in the grand scheme of things. The stock is still up more than five times its value for 2024 and it is nearly eight times the value it was a year ago.
On Thursday, MicroStrategy’s market cap was over $100 million, more than triple the value of the roughly 331,000 Bitcoin it owns (worth about $32.5 million due to the current Bitcoin price near $98,000). But with the fall in the company’s stock, its market cap dropped to around $80 million.
Citron Research’s Andrew Left, who was once a big supporter of the company’s stock and urged investors to buy it to get a hold of Bitcoin, wrote today, “MicroStrategy’s [valuation] has completely detached from bitcoin fundamentals.” Despite still being bullish on Bitcoin, Andrew has begun to short MicroStrategy’s stock.
Analysts have noticed the positive cycle the company’s stock has enjoyed recently. The stock’s high valuation has allowed it to raise capital at good prices and buy more Bitcoin. As the value of Bitcoin increases, so does the stock, allowing MicroStrategy’s team to purchase even more Bitcoin.
“If you want to speculate that bitcoin is set to rise, buy some,” commented Jonathan Weil in the WSJ’s Heard on the Street column. “To go long on MicroStrategy’s stock is to bet that inefficiencies of the market will become even more extreme.”