(Bloomberg) — MicroStrategy Inc shares tumbled after Andrew Left’s Citron Research said in a post on X that it’s betting against the software company, which has effectively transformed itself right into a Bitcoin investment fund.
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The stock fell 16% to shut at about $397, reversing a gain of nearly 15% from earlier within the session. The slump marked the stock’s worst day since April 30 and got here despite the prolonged rally in Bitcoin, which rose to a record high.
Under Chair Michael Saylor, MicroStrategy has turn into nearly synonymous with Bitcoin after it snapped up billions of dollars of the cryptocurrency, sometimes selling debt to finance the purchases. But with the rolllout of Bitcoin ETFs, investors should purchase such funds directly as a substitute of using MicroStrategy’s stock as a publicly traded proxy.
Now that Bitcoin investing is “easier than ever,” MicroStrategy’s volume “has completely detached from BTC fundamentals,” Citron wrote in an X post, adding that “while Citron stays bullish on Bitcoin, we’ve hedged with a brief $MSTR position.”
MicroStrategy didn’t immediately reply to a Bloomberg News request for comment.
The surge in Bitcoin — which pushed over $98,000 Thursday — has also lifted MicroStrategy shares, that are still up over 500% this yr. Before today’s slump, the corporate briefly held a market capitalization of greater than $100 billion, making it as precious as one in all the highest 100 stocks within the S&P 500. At Thursday’s close, MicroStrategy’s market value was about $89 billion.
Citron Research isn’t the primary to suggest hedging a bullish Bitcoin position by shorting MicroStrategy. In March, Kerrisdale Capital Management LLC made an analogous call, saying that it was long Bitcoin but short shares of MicroStrategy.
MicroStrategy Falls as Kerrisdale Shorts, Says It’s Long Bitcoin
The post is one in all few public positions that Citron has put out since founder Andrew Left was charged with securities fraud in July. In September, the firm posted about one other previous bet on private prisons.
In October, Left asked a judge to dismiss the US Securities and Exchange Commission’s lawsuit against him.
(Updates stock moves at market close)
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