MicroStrategy (MSTR) stock was on another wild ride early Thursday, rising as much as 11% before forfeiting a chunk of those gains after short-seller Citron Research said it had taken a new bet against the stock, which has gained over 600% this year.
MicroStrategy stock has soared more than 80% since crypto-friendly president-elect Donald Trump’s victory earlier in November. Bitcoin itself is up roughly 30% over the same period, hitting a fresh record of $98,000 early Thursday before paring gains after the market open.
The software-company-turned-bitcoin-play disclosed earlier this week it purchased another 51,780 bitcoins for approximately $4.6 billion in cash at an average price just over $88,500 per bitcoin. The company has acquired a total of 331,200 bitcoin for $16.5 billion, spending an average of 49,874 per bitcoin.
This stock surge, however, has caught the attention of investors that see this meteoric move in 2024 as potentially unsustainable.
In a post on X early Thursday, Citron Research said that while the firm remains bullish on bitcoin — and was bullish on MicroStrategy’s bitcoin play years ago — the move in MicroStrategy stock has “completely detached from BTC fundamentals.”
“Bitcoin is dramatically beating the Magnificent 7,” said MicroStrategy chair Michael Saylor in the company’s most recent earnings call in October, adding, “[Y]our best hope to actually keep up with the Magnificent 7 is constructive bitcoin strategy.”
The company in recent years adopted Bitcoin as its primary treasury reserve asset through investments funded by equity, debt financing, and its own cash flows, under the leadership of Michael Saylor, who served as CEO until 2022 until assuming the role of chairman.
MicroStrategy began investing in Bitcoin in 2020 with what now seems like a measly $250 million investment.
“We pride ourselves on being at the forefront of institutional bitcoin adoption,” said CFO Andrew Kang in the company’s October 30 earnings call.
Saylor added:. “If you’ve been following our journey, you know that our thesis was bitcoin is like the Facebook (META) of money or the Google (GOOG) of money. It is the dominant digital monetary network.”
As Yahoo Finance’s Josh Schafer reported earlier in November, crypto-related stocks in addition to MicroStrategy and Bitcoin, such as Coinbase (COIN) and Robinhood (HOOD), have been on an upward trajectory since Trump’s victory as part of the so-called Trump trade.
The president-elect has made promises to the industry including the appointment of a crypto Presidential Advisory Council, firing SEC Chair Gary Gensler, and creating a “strategic national bitcoin stockpile.” In July, Trump also attended a bitcoin conference in Nashville in a signal of his friendliness to the sector.
Laura Bratton is a reporter for Yahoo Finance. Follow her on X @LauraBratton5.
Josh Schafer contributed reporting.
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