MicroStrategy (MSTR) stock was on one other wild ride early Thursday, rising as much as 11% before forfeiting a piece of those gains after short-seller Citron Research said it had taken a latest bet against the stock, which has gained over 600% this 12 months.
MicroStrategy stock has soared greater than 80% since crypto-friendly president-elect Donald Trump’s victory earlier in November. Bitcoin itself is up roughly 30% over the identical period, hitting a fresh record of $98,000 early Thursday before paring gains after the market open.
The software-company-turned-bitcoin-play disclosed earlier this week it purchased one other 51,780 bitcoins for roughly $4.6 billion in money at a mean price just over $88,500 per bitcoin. The corporate has acquired a complete of 331,200 bitcoin for $16.5 billion, spending a mean of 49,874 per bitcoin.
This stock surge, nevertheless, has caught the eye of investors that see this meteoric move in 2024 as potentially unsustainable.
In a post on X early Thursday, Citron Research said that while the firm stays bullish on bitcoin — and was bullish on MicroStrategy’s bitcoin play years ago — the move in MicroStrategy stock has “completely detached from BTC fundamentals.”
“Bitcoin is dramatically beating the Magnificent 7,” said MicroStrategy chair Michael Saylor in the corporate’s most up-to-date earnings call in October, adding, “[Y]our greatest hope to really sustain with the Magnificent 7 is constructive bitcoin strategy.”
The corporate in recent times adopted Bitcoin as its primary treasury reserve asset through investments funded by equity, debt financing, and its own money flows, under the leadership of Michael Saylor, who served as CEO until 2022 until assuming the role of chairman.
MicroStrategy began investing in Bitcoin in 2020 with what now looks like a measly $250 million investment.
“We pride ourselves on being on the forefront of institutional bitcoin adoption,” said CFO Andrew Kang in the corporate’s October 30 earnings call.