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MicroStrategy’s Stock Plummets by 8% Following $209 Million Bitcoin Buy
In a shocking turn of events, MicroStrategy’s stock has taken a significant hit, plummeting by a whopping 8% in the wake of its massive $209 million Bitcoin (BTC) purchase. The business intelligence firm’s Chairman Michael Saylor announced the acquisition on December 29, which saw the company add another 2,136 BTC to its already substantial holdings.
According to Google Finance, the stock has taken a significant hit, currently trading at $302 per share after dipping by 8.19%. This decline comes despite the fact that MicroStrategy has been aggressively accumulating Bitcoin since 2020 and now holds an impressive 446,400 BTC, acquired for a staggering $27.9 billion at an average price of $62,428 per bitcoin.
The latest acquisition is part of a larger trend for the company, as it has consistently added to its Bitcoin holdings over the past year or so. In fact, this buy marks the eighth consecutive week in which MicroStrategy has made such a purchase.
As part of the funding process, the firm was forced to offload 592,987 shares on the open market. While this may have generated some short-term liquidity for the company, it did little to stem the tide of investor unease that has seen its stock price tumble.
Not everyone is convinced by MicroStrategy’s bold strategy, however. Some analysts have taken to social media to express their doubts about the company’s ability to generate returns on its Bitcoin investment. Felix Hartmann, managing partner at Hartmann Capital, went so far as to predict that the firm will eventually go bankrupt due to its “hyperbitcoinization” (his words).
While such a dire prediction may seem extreme, it is undeniable that MicroStrategy’s Bitcoin purchases have led to a significant increase in its debt levels. As such, some investors are understandably nervous about the company’s ability to generate returns on its massive investment.
Despite this, it remains to be seen whether or not this latest decline will signal a turning point for the firm. One thing is certain, however: the cryptocurrency market is always volatile and prone to wild swings in sentiment.
Source: www.crypto-news.net
