Shares of MicroStrategy (MSTR) went on another wild ride early Thursday, rising as much as 11% before erasing some of those gains after short seller Citron Research said it had taken a new bet against the stock, which is up this month than 600% has won. year.
Shares of MicroStrategy have risen more than 80% since crypto-friendly President-elect Donald Trump’s victory earlier in November. Bitcoin itself is up about 30% over the same period, hitting a new all-time high of $98,000 early Thursday before paring gains after the market opened.
The software company turned bitcoin announced earlier this week that it was buying an additional 51,780 bitcoins for about $4.6 billion in cash at an average price of just over $88,500 per bitcoin. The company has acquired a total of 331,200 bitcoin for $16.5 billion, spending an average of $49,874 per bitcoin.
However, this stock surge has caught the attention of investors who view this rapid move into 2024 as potentially unsustainable.
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“Bitcoin dramatically beats the Magnificent 7,” MicroStrategy Chairman Michael Saylor said in the company’s most recent earnings call in October, adding: “[Y]Our best hope for actually keeping up with the Magnificent 7 is a constructive bitcoin strategy.”
The company has adopted Bitcoin as its main treasury reserve in recent years through investments funded by equity, debt financing and its own cash flows, under the leadership of Michael Saylor, who served as CEO until 2022 until he took on the role of chairman.
MicroStrategy started investing in Bitcoin in 2020 with what now seems like a paltry $250 million investment.
“We are proud to be at the forefront of institutional adoption of Bitcoin,” CFO Andrew Kang said in the company’s Oct. 30 earnings call.
