MicroStrategy’s stock experienced significant volatility on Thursday morning, falling to $467.53 by 11:36 AM EST, down over $6 from its previous close of $473.83. The intraday chart shows a turbulent morning session, with the stock opening near $520 before dropping to around $440 and then partially recovering. This volatility occurred amidst a mixed broader market backdrop, with the Dow Jones and S&P 500 showing modest gains while the Nasdaq edged lower.
The company’s year-to-date performance has been impressive, with MicroStrategy shares skyrocketing 582%, gaining $399.01 per share since January. The stock saw a steep acceleration in October, climbing from around $200 to over $540 in just weeks. Prominent short-seller Citron Research announced a new bearish position on the company during this volatile session. MicroStrategy recently expanded its Bitcoin holdings, purchasing 51,780 bitcoins for approximately $4.6 billion in cash, with a total of 331,200 coins acquired for $16.5 billion at an average cost of $49,874 per bitcoin.
The stock’s momentum intensified following Donald Trump’s election victory in early November, with a surge of 110%, while Bitcoin rose 44% to reach $98,000. With a current market capitalization of $94.36 billion and an average daily trading volume of 26.75 million shares, MicroStrategy has become a significant player in the crypto-adjacent equity space. According to Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, MSTR was America’s most-traded stock on the day of the volatile session. At the time of writing, MSTR is the US stock with the second-highest daily trading volume.
Citron Research’s new bearish position on MicroStrategy marks a significant reversal from their late 2020 stance, where they recommended the stock with a $700 price target, applauding CEO Michael Saylor’s Bitcoin strategy. However, they now argue that the widespread availability of Bitcoin investment options through spot ETFs, Coinbase, and Robinhood has disconnected MicroStrategy’s trading volume from Bitcoin’s fundamentals. Despite maintaining a bullish outlook on Bitcoin, Citron has chosen to hedge with a short position in MicroStrategy’s stock, suggesting that the remarkable rally might be overextended.
It is interesting to note that nearly four years ago, Citron Research was the first to recommend MicroStrategy as the ultimate way to invest in Bitcoin, setting a $700 target. Fast forward to today, and MSTR has skyrocketed to over $5,000 (adjusted), showcasing the incredible growth of the stock. This shift in Citron’s position reflects the changing dynamics within the market and the evolving landscape of Bitcoin investments. CEO Michael Saylor’s visionary Bitcoin strategy has certainly propelled MicroStrategy to new heights, making it a key player in the crypto-adjacent equity space.
