Shares of MicroStrategy (MSTR) plunged more than 16% after short seller Citron Research said it had made a new bet on the stock, which is up more than 500% this year.
Even with Thursday’s decline, shares of MicroStrategy are up more than 50% 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 on Thursday.
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 bitcoins for $16.5 billion, issuing 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 is dramatically beating the ‘Magnificent Seven,’” MicroStrategy Chairman Michael Saylor said in the company’s most recent earnings call in October, adding: “Your best hope for actually keeping pace with the Magnificent Seven is a constructive bitcoin strategy.”
Read more: Bitcoin breaks another record: is this a good time to invest?
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 before taking 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.
Saylor added: “If you’ve been following our journey, you know that our thesis was that bitcoin is like the Facebook of money or the Google of money. It is the dominant digital monetary network.”
As Yahoo Finance’s Josh Schafer reported earlier in November, other crypto-related stocks such as Coinbase (COIN) and Robinhood (HOOD) have been on an upward trajectory since Trump’s victory as part of the so-called Trump trade.
The president-elect has made promises to the industry, including appointing a presidential advisory council on cryptocurrency, firing SEC Chairman Gary Gensler and creating a “strategic national bitcoin supply.” In July, Trump also attended a bitcoin conference in Nashville in a signal of his friendliness toward the industry.
Laura Bratton is a reporter for Yahoo Finance. Follow her on X @LauraBratton5.
Josh Schafer contributed reporting.
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