Why MicroStrategy (MSTR) Shares Are Falling Today

Shares of business analytics software company MicroStrategy (NASDAQ:MSTR) fell 7.7% in the morning session after the company sold 592,987 shares for approximately $209 million. With the proceeds, the company purchased approximately 2,138 bitcoins. This acquisition brings MSTR’s total Bitcoin holdings to approximately 446,400 bitcoins, for an average purchase price of approximately $62,428 per bitcoin. The purchase size is modest compared to previous announcements amid a downturn in the crypto space. Bitcoin, the largest cryptocurrency by market value, recently fell below $92,000 – down more than 10% from its all-time high earlier this month.

Shares ended the day at $302.78, down 8.3% from the previous close.

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MicroStrategy stock is extremely volatile, having seen 97 moves of more than 5% in the past year. In that context, today’s move indicates that the market sees this news as meaningful, but not as something that would fundamentally change its perception of the company.

The previous big move we wrote about was seven days ago, when shares fell 6.5% after stocks with exposure to the crypto space fell as momentum in the crypto market weakened after a strong rally that started in the weeks ahead of the November 2024 elections. Investors had hoped for more favorable regulations under a new administration. Although the victory of the incoming Trump administration was initially viewed positively, the market now appears to be looking for new catalysts to maintain momentum.

Moreover, profit-taking by investors may contribute to the downturn. Notably, Bitcoin – the largest cryptocurrency by market cap – fell more than 10% after reaching an all-time high of $106,000 on December 16, 2024. On December 23, 2024, MicroStrategy, often considered a Bitcoin proxy due to its substantial cryptocurrency holdings, was , announced the purchase of 5,262 bitcoins at an average price of $106,662.

MicroStrategy is up 339% year-to-date, but at $300.95 per share it is still trading 36.5% below its 52-week high of $473.83 set in November 2024. Investors who bought $1,000 five years ago worth of MicroStrategy stock would now be looking at an investment worth $21,192.

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