Retail Stung by MicroStrategy Premium as MSTR Stock Dumps 35% in a Week

MicroStrategy stock (MSTR) has fallen a whopping 35% from its peak of $535, seen on November 21. The shares tanked to $340 on Tuesday before recovering to end the day’s trading at $353, according to Google Finance.

The Kobeissi Letter reported on Nov 27 that this equates to around $30 billion in market capitalization erased in just four trading days and is one of the firm’s largest four-day drops in history.

The big stock slump comes as Bitcoin pulled back around 9% from its all-time high on Nov. 22.

Saylor Premium Hits Retail

Moreover, MicroStrategy stock has fallen over four times more than Bitcoin over the past week following retail FOMO loading up on the shares prior to their peak, added Kobeissi, who stated:

“We’ve all heard that MicroStrategy is a ‘levered Bitcoin play’ but this is a whole new level of volatility for the Bitcoin proxy.”

WOW.

MicroStrategy stock, $MSTR, just fell a MASSIVE -35% from its peak seen on November 21st.

That’s ~$30 BILLION of market cap erased in 4 trading days as #Bitcoin fell ~9% from its high.

This is one $MSTR‘s largest 4-day drops in history.

What just happened?

(a thread)

— The Kobeissi Letter (@KobeissiLetter) November 26, 2024

It added that on one day alone last week, Nov. 20, retail investors bought around $42 million worth of MSTR, for a total of nearly $100 million worth of retail buying for the week.

“This marked the largest daily retail buy on record and was eight times higher than the daily average seen in October.”

It added that over the past two months, MicroStrategy has outperformed Bitcoin by almost three times. However, over the last few days, “this correlation has broadened,” and MSTR is now trading with “significantly more volatility,” it was noted.

The firm currently holds 386,700 BTC worth around $36 billion. However, with a current market cap of $73 billion, the stock is still trading at more than twice its Bitcoin holdings, but the premium has narrowed.

“The most important question to ask here is if Saylor can continue to raise debt to buy Bitcoin,” asked the Kobeissi Letter.

Saylor remains unperturbed, pointing out on X on Nov. 26 that the firm’s treasury operations delivered a BTC yield of 35.2%, providing a net benefit of 88,820 BTC to its shareholders.

Quarter to date, $MSTR‘s treasury operations delivered a BTC Yield of 35.2%, providing a net benefit of ~88,820 BTC to our shareholders, or ~1586 BTC per day. At $92K per BTC, that would equate to $8.2 billion for the quarter so far, or $146 million per day.

— Michael Saylor⚡️ (@saylor) November 26, 2024

Crypto Stocks Tank

Coinbase shares (COIN) have also taken a hit, dropping 12% over the past week to trade at $295 after-hours on Tuesday. These losses are also larger than Bitcoin’s pullback.

Meanwhile, mining stocks are also in freefall, with Marathon Digital (MARA) losing 5.5% on the day yesterday, falling to $25, while Riot Platforms (RIOT) dumped 7.4% on the day, sliding to $11.17.

Crypto market cap was down 3.6% to $3.34 trillion as Bitcoin dipped below $91,000 briefly in late trading on Tuesday before making a move back toward $93,000 during the Wednesday morning Asian trading session.