TLDR
- MicroStrategy (MSTR) stock dropped 8% this week to $336.57, its lowest level since April as Bitcoin fell 8.6% from recent highs
- Company revised its share issuance policy, now allowing stock sales below 2.5x net asset value for broader capital raising purposes
- Previous guidance restricted share sales below 2.5x mNAV to only debt interest and dividend payments
- Bitcoin treasury companies are struggling, with Coinbase down 27%, Marathon Digital down 19.4%, and Riot Platforms down 14.7% over the past month
- MicroStrategy remains the largest corporate Bitcoin holder with 629,376 BTC valued at approximately $71.34 billion
MicroStrategy shares tumbled to their lowest point since April this week. The stock closed at $336.57 on Tuesday, down 7.43% for the day.
The decline accelerated after CEO Michael Saylor announced changes to the company’s equity issuance guidance. Bitcoin’s recent drop from its all-time high of $124,128 has also pressured the stock.
The last time MSTR traded at these levels was in mid-April when Bitcoin was around $84,000. The stock reached a high of $455.90 during Bitcoin’s July rally.
After-hours trading saw an additional 0.76% decline. The sell-off reflects growing investor concerns about the company’s capital strategy.
Policy Shift Sparks Investor Backlash
Saylor’s announcement on social media platform X revealed the company would provide “greater flexibility in executing our capital markets strategy.” The updated guidance allows MicroStrategy to issue shares when trading below 2.5 times its net asset value.
This marks a reversal from the July 31 earnings call commitment. At that time, the company stated it would not issue shares below 2.5x mNAV except to pay interest and dividends.
The new policy allows tactical share issuance for debt interest payments, preferred equity dividends, and “when otherwise deemed advantageous to the company.” Investors quickly criticized the change as a betrayal of previous commitments.
One X user wrote that the update raised red flags. They questioned why the company would promise one thing during earnings and change course weeks later.
Some former shareholders called the move a breach of trust. They cited Saylor’s previous assurances during earnings calls about maintaining strict issuance thresholds.
Crypto Stock Weakness Spreads
MicroStrategy’s troubles mirror broader weakness in crypto-exposed public companies. Coinbase shares have fallen nearly 27% over the past month.
Marathon Digital dropped 19.4% during the same period. Riot Platforms declined 14.7% as Bitcoin treasury companies face mounting pressure.
Tuesday’s trading session saw widespread crypto stock declines. Bullish closed down 6.09% at $59.51 with another 3.24% drop in after-hours trading.
Robinhood fell 6.54% to $107.50. Coinbase Global dropped 5.82% while Galaxy Digital lost 10.06%.
Circle slipped 4.49% as the broader Nasdaq Composite fell 1.46%. The weakness reflects waning enthusiasm for Bitcoin ETFs and rising outflows from Ethereum products.
Analysts point to macroeconomic uncertainty as another contributing factor. The correlation between crypto stocks and Bitcoin’s volatility remains strong.
Despite the recent policy change and stock decline, MicroStrategy maintains its position as the largest corporate Bitcoin holder. The company owns 629,376 BTC valued at approximately $71.34 billion.
The updated ATM guidance now allows share issuance at the current 1.55 mNAV level. This provides the company with more options to raise capital for Bitcoin purchases.
