MicroStrategy’s $5.4 Billion Bitcoin Acquisition Causes Stock Dip

November 25, 2024

price of MicroStrategy (MSTR) rose before market opening on Monday, only to later decrease after the company announced it had purchased $5.4 billion worth of Bitcoin. This recent acquisition adds to MicroStrategy’s already impressive Bitcoin stash, bringing their total holdings to around 386,700 bitcoins valued at approximately $37 billion.

To finance these recent acquisitions, MicroStrategy sold convertible bonds and new stocks, raising a total of $5.4 billion. In the prior week, the company had also purchased $4.6 billion worth of Bitcoin. This move comes as Bitcoin approaches the $100,000 mark for the first time, although it was trading at just over $95,000 on Monday.

MicroStrategy, traditionally known as a business software provider, has been investing in Bitcoin since August 2020. Their increased acquisitions this year, particularly after Donald Trump’s November 5 election win, reflect investor confidence in a crypto-friendly administration and Congress.

Despite the positive news of Bitcoin purchases, MicroStrategy’s stock saw a decline in trading on Monday. After an initial jump in pre-market trading, the stock fell by nearly 9% upon market opening. While it has since regained some losses, the stock remains down by approximately 5%. Even though MicroStrategy’s stock has gained over 500% year-to-date, some investors are concerned about its rapid rise and view it as overvalued. Short-sellers, such as Galaxy Digital CEO Mike Novogratz and Citron Research, have expressed caution about the stock’s potential for a sharp correction.

As of now, MicroStrategy’s latest Bitcoin purchase, along with the fluctuating stock prices and analyst comments, continue to be topics of interest in the financial world. To have a hand in shaping our news stories, feel free to share any news tips with us at [email protected].