- MicroStrategy shares fell 4.8% despite Bitcoin reaching $100,000, marking a 28% decline from its all-time high.
- The company’s stock currently trades at 2.3x its Bitcoin holdings, down from 3.4x in November 2023.
- Michael Saylor reports 63.3% increase in Bitcoin per diluted share since early 2024.
- MicroStrategy has achieved a 68% return on all Bitcoin purchases to date.
- NASDAQ 100 committee is evaluating MicroStrategy for potential index inclusion by December 13.
MicroStrategy (MSTR) shareholders experienced an unexpected downturn as the company’s stock declined 4.8% on Thursday, despite Bitcoin reaching an unprecedented $100,000 milestone. The cryptocurrency investment firm’s shares closed at $406, following a pre-market flash crash from $443 to $379.
Premium Valuation Under Pressure
The company’s market performance has raised questions about its premium valuation model. Trading at 2.3 times its Bitcoin holdings, MicroStrategy has seen its multiple compress significantly from 3.4x in late November. Some investors anticipate multiples reaching high single digits or even double digits.
Chairman Michael Saylor highlighted the company’s 63.3% increase in Bitcoin per diluted share since January 2024. Despite this growth, the stock’s correlation with Bitcoin prices remains strong, as evidenced by the parallel market movements.
Institutional Recognition and Performance
MicroStrategy’s market position has strengthened considerably since Saylor’s 2022 resignation as CEO, which followed a $917 million Bitcoin impairment loss. The company has emerged as the top-performing large-cap stock in U.S. markets, recording a 500% gain this year.
The firm’s Bitcoin investment strategy has yielded a 68% return on total purchases. This performance has attracted institutional attention, with the NASDAQ 100 committee considering MicroStrategy for index inclusion, with a decision expected by December 13.
MicroStrategy’s business model includes exploring revenue opportunities through what Saylor terms “bitcoin yield,” generated through bond markets and arbitrage strategies, though Bitcoin itself doesn’t provide native yield or dividends.
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