• MicroStrategy’s stock dropped 1.1% to $136.63 Thursday, hitting its lowest level since August 2020
• The cloud-based business intelligence company disclosed that it sold 704 BTC on December 22nd for $11.8 million
• Miller Tabak + Co chief market strategist Matt Maley weighed in on the MicroStrategy BTC development
MicroStrategy Inc (NASDAQ: MSTR) recently saw its shares plummet to their lowest level for more than two years after a recent filing revealed that the cloud-based business intelligence company had sold 704 Bitcoin on December 22nd for $11.8 million. The stock dropped 1.1% to $136.63 Thursday, hitting its lowest level since August 2020, and is currently at a 75% drawdown year-to-date (YTD).
In the filing, MicroStrategy said that it sold the Bitcoin for tax purposes but re-purchased 810 more two days later. Altogether, the cloud computing company said it bought roughly 2,395 Bitcoin between November and December 21st. This acquisition took place through MicroStrategy’s subsidiary MacroStrategy, costing approximately $42.8 million in cash.
Miller Tabak + Co chief market strategist Matt Maley weighed in on the MicroStrategy BTC development, saying that the company’s reputation as a devoted token buyer amid crypto winter is worrisome to investors. He believes that the company’s dedication to buying Bitcoin despite the declining prices might be a sign that it is expecting further losses.
Maley also noted that MicroStrategy’s stock has been on a downward trajectory since the beginning of the year and is unlikely to rebound anytime soon. He said that while the company’s focus on blockchain technology and cryptocurrency may be a smart move in the long-term, it is important to remember that the stock market is unpredictable and that the price of Bitcoin can fluctuate significantly.
Investors should also take into consideration that MicroStrategy is not the only company that is investing in Bitcoin. Other major firms, such as Square and PayPal, have also made moves to invest in the digital asset. This could potentially mean that the market is becoming more saturated and that it is difficult for MicroStrategy to stand out and make a profit.
Overall, while MicroStrategy’s Bitcoin investment may have potential benefits in the long-term, investors should be wary of the risks associated with investing in cryptocurrency. It is important to remember that the stock market is unpredictable and that the price of Bitcoin can be volatile. As such, investors should do their own research and understand the risks before investing in any asset.