MicroStrategy Stock Sees Bullish Sentiment Decline Amid 40% Correction
Despite joining the Nasdaq-100 index last month, traders are no longer pursuing MicroStrategy Inc (NASDAQ: MSTR), indicating a decline in bullish sentiment for this Bitcoin proxy. MSTR stock has decreased by 40% from its peak of $473 in November 2024, closing the year below $300.
Recent data from Market Chameleon reveals that the 250-day put-call skew for MSTR has shifted from -20% to zero over the past three weeks. This change means that call options, which previously had a premium due to bullish expectations, are now equivalent to put options, suggesting a sentiment transition from highly bullish to neutral among traders. Markus Thielen, founder of the 10x Research platform, stated:
“With MicroStrategy shares now down 44% from their peak and other companies adopting bitcoin as a treasury asset strategy at a much smaller scale, the bitcoin tailwind generated by this narrative appears to be losing steam.”
Over the past four years, MicroStrategy has accumulated 446,400 BTC, valued at over $42 billion at current prices. The company has financed these purchases through debt sales and equity dilution, making MSTR stock a leveraged investment in Bitcoin, which saw a 346% increase in 2024 compared to Bitcoin's 122% rise.
However, during December, while Bitcoin dropped 3%, MicroStrategy stock fell by 25%. Thielen noted that the stock’s underperformance suggests investors are unwilling to pay an implied price of over $200,000 per Bitcoin through MicroStrategy when it can be obtained directly at lower prices.
Where is MicroStrategy (MSTR) Stock Heading Next?
Recently, MicroStrategy executive chairman Michael Saylor proposed an equity dilution plan to increase the number of floating MSTR stocks from 330 million to 10 billion. This initiative aims to raise capital for further Bitcoin acquisitions but has raised investor concerns regarding potential stock price depreciation due to dilution.
Critics argue that this move could devalue existing shares. Conversely, if shareholders reject the proposal, the company might lose its capability to leverage Bitcoin purchases, threatening its core strategy. This creates a challenging “lose-lose” situation for the firm.
In pre-market trading on Thursday, MicroStrategy stock is up by 6.2%, regaining the $300 level.