MicroStrategy’s stock has plunged nearly 40% from its all-time high of just over $540 per share.
Disclaimer: The author of this analysis holds shares in MicroStrategy (MSTR).
Bitcoin (BTC) development firm MicroStrategy (MSTR) has been a standout performer in 2024. The stock is up an impressive 416% year-to-date and had surged as much as 600% at its peak last week.
However, a sharp reversal began on November 21, following a short report published by Citron Research. Since then, MicroStrategy shares have tumbled nearly 40%, leaving retail investors caught off guard. The timing coincided with Bitcoin’s decline of almost 10%, falling from just under $100,000 to around $90,000.
On November 20, retail investors purchased a record $42 million worth of MicroStrategy shares in a single day, according to The Kobeissi Letter, a leading global market commentary. This was eight times the average daily retail buying seen in October. Over the past week alone, retail investors snapped up nearly $100 million worth of MicroStrategy stock.
Despite this retail enthusiasm, the drop in MicroStrategy’s stock has significantly reduced its net asset value (NAV) premium. The company’s market capitalization, currently at $75 billion, reflects a premium of just 2.09 times its Bitcoin holdings, which are valued at $36 billion. This marks one of the lowest NAV premiums since September.
The trading frenzy around MicroStrategy has reached unprecedented levels. Last week, the stock recorded $136 billion in trading volume—far surpassing any week during the GameStop (GME) mania of early 2021.
“Even the most intense week of GameStop’s surge didn’t come close to the trading volume MicroStrategy just experienced,” said Eric Balchunas, Senior Bloomberg Analyst. “For context, even Amazon (AMZN) has never had a week like this.”
