Microstrategy Inc shares fell to the lowest levels seen since August of 2020, after the software firm, which had bet heavily on Bitcoin, disclosed it had engaged in a sale of the token for the first time ever.
Shares fell 1.1% to $136.63 on Thursday, bringing it down 75% for the year. Bitcoin overall is down 64% since the start of the year, though on Thursday it rose under 1% to about $16,590.
In a filing released Wednesday, the company revealed it had acquired roughly 2,395 Bitcoin from the start of November to December 21st. It purchased them through its MacroStrategy subsidiary, and paid about $42.8 million in cash. The company then sold 704 of the tokens on December 22nd, for roughly $11.8 million, citing tax purposes, before it bought 810 more two days later.
Matt Maley, chief market strategist for Miller Tabak + Co. said, “Investors seem to be concerned about their announcement that they’re still a net buyer of crypto. Most people have been hoping that MSTR might scale back their holdings after Michael Saylor stepped down as CEO. This news means they don’t seem to want to do that anytime soon.”
MicroStrategy held roughly 132,500 Bitcoin as of December 27th, paying an average price of $30,397 per coin.
Jefferies analyst Brent Thill, who rates MicroStrategy “underperform,” and gives it a target price of $110, wrote in a note, “Given MicroStrategy’s $2.4 billion in leverage, we believe the company may have too much leverage for Bitcoin, and could face some liquidity risk.”
Over the pandemic period, MicroStratey became known for acquiring Bitcoin, driven mostly by Saylor. Although he stepped down from the CEO position, Saylor is still serving as executive chairman, and is overseeing its Bitcoin strategy.
Back in 2020, before Saylor had announced the company’s Bitcoin strategy, MicroStrategy had traded at roughly $120 per share. By February of 2021, the company reached an all-time high of $1,315, before the crypto-winter began, and Bitcoin’s rapid fall took the wind out of the company’s sales.
