MicroStrategy’s $5.4 Billion Bitcoin Buy Boosts Holdings, Stock Dips Amid Market Turmoil

MicroStrategy (MSTR) announced on November 25, 2024, that it purchased an additional 55,000 bitcoins for $5.4 billion. This acquisition occurred as bitcoin reached all-time highs, trading above $99,000, following Donald Trump’s recent presidential victory.

MicroStrategy has been actively acquiring bitcoins since 2020, positioning itself as a significant player in the cryptocurrency market. The recent purchase occurred between November 18 and November 24, with the company acquiring bitcoins at an average price of $97,862 each. This latest acquisition brings MicroStrategy’s total bitcoin holdings to approximately 386,700, which were purchased for an aggregate price of about $21.9 billion, averaging $56,761 per bitcoin.

Despite the substantial investment in bitcoin, MicroStrategy’s stock has experienced volatility. After the announcement of the latest purchase, shares initially rose by 2% but later fell by over 2%. Year-to-date, the stock is up more than 515%, although it dropped over 15% last week following a report from short seller Citron Research, which expressed skepticism about the stock’s valuation relative to bitcoin fundamentals.

Analysts remain optimistic about MicroStrategy’s stock, with Bernstein raising its price target from $290 to $600, and Benchmark increasing its target to a Street high of $640. Market sentiment is influenced by the recent surge in bitcoin prices, which have been flirting with the $100,000 mark, reaching highs of over $99,400.

In summary, MicroStrategy’s aggressive bitcoin acquisition strategy continues to attract attention, with significant investments made amidst soaring cryptocurrency prices. The company’s stock performance remains a topic of debate among analysts, reflecting the complex relationship between its stock value and bitcoin market dynamics.