On December 30, MicroStrategy (MSTR) saw its stock price drop below $300 in after-hours trading, marking a sharp decline of 46% from its all-time high reached in November. The company’s efforts to raise billions in new stock shares to support its $42 billion funding strategy seem to be taking a toll on investor sentiment.
According to Google Finance data, MicroStrategy’s stock fell for the second consecutive day, closing at $302.96—a loss of 8.2%. After-hours trading saw a further decline, with the stock dipping 3% to $293.59.
As of December 30, 2024, MicroStrategy’s total debt stood at $7.26 billion, with a weighted average interest rate of 0.476%. The company’s debt includes key maturities such as $1.05 billion due in February 2027, and $3 billion due in November 2029, both at 0% interest. Despite these manageable interest rates, some analysts remain skeptical about the company’s long-term sustainability.
MicroStrategy’s aggressive Bitcoin acquisition strategy continues to raise questions. Last week, the company purchased an additional 2,138 BTC, bringing its total holdings to 446,400 BTC. While this has contributed to MSTR’s massive 342% growth this year, questions about the long-term impact of such an aggressive accumulation strategy persist.
In addition to this, MSTR was added to the Nasdaq 100 index on December 23, which led to a brief surge in its stock price by 402%. However, since its peak on November 21 at $543, MSTR has seen a steady downtrend.
Is MicroStrategy Losing Its Momentum?
Despite the growth, some critics are questioning the sustainability of MSTR’s approach. Notably, Martin Shkreli, co-founder of Elea Capital, called MicroStrategy’s CEO Michael Saylor an “overzealous” and “not credible” advocate of Bitcoin. Shkreli’s comments followed a shareholder vote on December 24 that saw just 0.5% support for the company’s Bitcoin treasury strategy, raising concerns about the future direction of the company.
Adding to the concerns, there is speculation that MicroStrategy may seek approval to increase its authorized share count by up to 10 billion shares, a move that would dramatically dilute shareholder value. If approved, the company’s total shares could soar from 330 million to 10.33 billion—leading some to worry that the firm is in a “lose-lose” situation.
MicroStrategy has also faced criticism from analysts such as Jacob King and the Kobbeissi Letter, who have suggested that the company’s reliance on debt and equity issuance to fund its Bitcoin purchases is akin to a Ponzi scheme, potentially harming shareholders in the long run.
However, not everyone shares this pessimistic view. Felix Hartmann, founder of Hartmann Capital, remains optimistic. He points out that much of MicroStrategy’s debt is at near-zero interest rates, with repayment due in the long term, between 2027 and 2030. Hartmann believes that the volatility of Bitcoin prices will continue to impact MSTR’s stock, but that Saylor’s long-term vision will ultimately drive the company to greater heights before any major collapse.
Despite differing opinions among investors, it’s clear that MicroStrategy’s journey in the crypto world is far from predictable. The company’s “Bitcoin 21/21” goal is ambitious, and as it continues to navigate both volatile crypto markets and shareholder sentiment, only time will tell how its strategy will unfold.