MicroStrategy (MSTR) shares fell below $300 in after-hours trading on Monday, a significant 46% drop from their November peak.
MicroStrategy Shares Drop Below $300 Amid Investor Concerns Over Bitcoin Strategy
The decline comes as the company faces scrutiny over its plan to raise billions of dollars to fund its aggressive Bitcoin buying strategy.
Shares of MicroStrategy fell 8.2% to $302.96 on Monday, the lowest closing price since Nov. 8, according to Google Finance data. They fell another 3% to $293.59 in after-hours trading.
Despite a 342% year-to-date gain, supported by Bitcoin’s 121% annual price increase, MSTR has been falling since reaching an intraday high of $543 on Nov. 21.
Bitcoin Holdings and Nasdaq Inclusion
MicroStrategy continues to expand its Bitcoin holdings, purchasing 2,138 BTC last week, bringing its total to 446,400 BTC. MSTR was also included in the Nasdaq 100 index on Dec. 23, a move that some hope will stabilize investor confidence.
However, these developments have not alleviated concerns about the company's financial strategies.
Financing Strategy Sparks Controversy
The company’s “21/21” plan, announced in October, aims to raise $42 billion over three years to support bitcoin purchases, including $21 billion in new equity and $21 billion in fixed-income securities issuance.
Earlier this month, MicroStrategy proposed increasing its Class A common shares by 10 billion and its preferred shares by 1 billion. The offer drew mixed reactions, with critics warning of shareholder dilution.
Nick Ruck, director of LVRG Research, highlighted the risks:
“If the company buys more BTC, existing shareholders will be diluted, but if it doesn’t, it could signal that the company is stalling on a significant part of its value proposition.
This places MSTR in dangerous territory, especially as Bitcoin’s recent rally potentially plateaus.”
*This is not investment advice.
