MicroStrategy Expands Bitcoin Holdings with $5.4B Purchase Amid Stock Volatility

HIGHLIGHTS

• MicroStrategy, the top corporate Bitcoin holder, revealed a $5.4 billion Bitcoin acquisition, causing initial stock gains followed by a decline.
• The company intensified Bitcoin purchases this year, particularly after the November 5 election, anticipating a crypto-supportive government.
• As of late November, MicroStrategy owns approximately 386,700 Bitcoins, valued around $37 billion.

MicroStrategy (MSTR) experienced a surge in pre-market trading before its shares dropped on Monday after announcing a $5.4 billion Bitcoin acquisition. Between November 18 and 24, the firm added roughly 55,500 Bitcoins to its holdings, bringing the total to about 386,700 Bitcoins.

MicroStrategy Strengthens Bitcoin Portfolio

The recent Bitcoin purchases were financed through convertible bond sales and new stock issuance last week. This follows a prior $4.6 billion Bitcoin acquisition the week before.

Bitcoin prices neared $100,000 during these acquisitions but settled just above $95,000 by Monday morning.

Originally a business software company, MicroStrategy began investing in Bitcoin in August 2020 and accelerated its buying spree this year, especially after the November 5 election, as investors anticipated favorable crypto policies.

Reasons Behind MicroStrategy's Stock Decline

Despite an initial pre-market rise, MicroStrategy’s stock dropped as much as 9% during Monday trading before recovering slightly, ending about 5% lower. Still, the stock has soared over 500% year-to-date.

The rapid stock surge has sparked investor caution and attracted short-sellers. Galaxy Digital CEO Mike Novogratz predicted a sharper correction for Bitcoin-related stocks like MicroStrategy compared to Bitcoin itself. Similarly, Citron Research, while bullish on MicroStrategy, opened a short position as a hedge, citing concerns over the stock being 'overheated.'

Note: This article has been updated to include MicroStrategy’s latest Bitcoin acquisition, stock price changes, and analyst insights.

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