Shares of business analytics software company MicroStrategy (NASDAQ:MSTR) fell 6.5% in the morning session after stocks with exposure to the crypto space fell as momentum in the crypto market weakened following a strong rally that began in the weeks prior to the stock exchange of November 2024. elections.
Investors had hoped for more favorable regulations under a new government. 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 capitalization – fell by 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 significant cryptocurrency holdings, announced the acquisition of 5,262 bitcoins at an average price of $106,662.
Shares ended the day at $332.86, down 8.8% from the previous close.
The stock market overreacts to news, and big price drops can provide good opportunities to buy high-quality stocks. Is Now the Time to Buy MicroStrategy? View our full analysis report here. It’s free.
MicroStrategy stock is extremely volatile, having seen 98 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 7 days ago, when shares gained 6.7% on news that Bitcoin, the largest cryptocurrency by market cap, hit a new all-time high this weekend, surpassing $106,000. Meanwhile, MicroStrategy announced a significant expansion of its Bitcoin holdings this past week, acquiring 15,350 Bitcoins for approximately $1.5 billion at an average price of $100,386 per coin.
In addition, Nasdaq announced that MicroStrategy will be added to the Nasdaq-100 Index. The official inclusion is scheduled for December 23, 2024. This addition to the index could attract interest from mutual funds and ETFs, potentially increasing demand for MicroStrategy’s stock.
MicroStrategy is up 390% year-to-date, but at $335.82 per share it is still trading 29.1% 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 $23,268.
Today’s young investors probably haven’t read the timeless lessons in Gorilla Game: Picking Winners In High Technology, because it was written more than twenty years ago when Microsoft and Apple first established their supremacy. But if we apply the same principles, enterprise software stocks that leverage their own generative AI capabilities could be the gorillas of the future. In that spirit, we’re excited to present our special free report on a profitable, fast-growing business software stock that’s already riding the automation wave and looking to create the next generative AI.
