MicroStrategy Hit Lowest Since 2020 After Revealing Sale

(Bloomberg) — MicroStrategy Inc. shares touched the lowest level since August 2020 after the enterprise-software firm, better known in recent years as the largest corporate buyer of Bitcoin, disclosed its first ever sale of the token.

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The stock fell 1.1% to $136.63 on Thursday, and is down 75% this year. Bitcoin rose less than 1% to around $16,590, thought it has slumped 64% since the start of the year.

In a filing Wednesday, MicroStrategy said it acquired approximately 2,395 Bitcoin between the start of November and Dec. 21 through its MacroStrategy subsidiary, paying roughly $42.8 million in cash. It then sold 704 of the tokens on Dec. 22 for a total of around $11.8 million, citing tax purposes, before buying 810 more of them two days later.

“Investors seem to be concerned about their announcement that they’re still a net buyer of crypto,” said Matt Maley, chief market strategist for Miller Tabak + Co. “Most people have been hoping that MSTR might scale back their holdings after Michael Saylor stepped down as CEO. This news means they don’t seem to want to do that anytime soon.”

All in, MicroStrategy held about 132,500 Bitcoin worth more than $4 billion as of Dec. 27. The firm paid an average purchase price of $30,397 per Bitcoin.

“Given MicroStrategy’s $2.4 billion in leverage, we believe the company may have too much leverage for Bitcoin, and could face some liquidity risk,” Jefferies analyst Brent Thill wrote in a note Wednesday. Thill has an “underperform” rating on the shares and a target price of $110.

MicroStrategy had over the pandemic years become well known for its Bitcoin acquisitions, led largely by Saylor. Earlier this year Saylor relinquished that role and now serves as executive chairman at the firm and still leading its Bitcoin strategy.

MicroStrategy traded at around $120 before Saylor first announced the company’s Bitcoin purchases in 2020. The stock reached an all-time high of $1,315 in February 2021.

(Updates to include the closing share price in the second paragraph.)