(Bloomberg) — Shares of MicroStrategy Inc tumbled after Andrew Left’s Citron Research said in a post on X that it is betting against the software company, which has essentially transformed itself into a Bitcoin investment fund.
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The stock fell 16% to close at around $397, a gain of almost 15% from earlier in the session. The slump marked the stock’s worst day since April 30 and came despite Bitcoin’s extended rally, which soared to a record high.
Under chairman Michael Saylor, MicroStrategy has become nearly synonymous with Bitcoin after snapping up billions of dollars in cryptocurrency and sometimes selling debt to finance the purchases. But with the rollout of Bitcoin ETFs, investors can buy such funds directly instead of using MicroStrategy’s stock as a publicly traded proxy.
Now that investing in Bitcoin is “easier than ever,” MicroStrategy’s volume has become “completely disconnected from BTC fundamentals,” Citron wrote in an X-post, adding that “while Citron remains bullish on Bitcoin, we have hedged with a short $MSTR position. ”
MicroStrategy did not immediately respond to a Bloomberg News request for comment.
Bitcoin’s rise – which topped $98,000 on Thursday – has also lifted shares of MicroStrategy, which are still up more than 500% this year. Before today’s slump, the company briefly had a market cap of more than $100 billion, making it as valuable as one of the top 100 stocks in the S&P 500. As of Thursday’s close, MicroStrategy’s market value was about $89 billion.
Citron Research isn’t the first to suggest hedging a bullish Bitcoin position by shorting MicroStrategy. In March, Kerrisdale Capital Management LLC made a similar call, saying it was long Bitcoin but short shares of MicroStrategy.
MicroStrategy Falls While Kerrisdale Shorts, Says It’s Long Bitcoin
The post is one of the few public statements Citron has released since founder Andrew Left was charged with securities fraud in July. In September, the company reported on another previous bet on private prisons.
In October, Links asked a judge to dismiss the U.S. Securities and Exchange Commission’s lawsuit against him.
(Updates stock prices at market close)
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