Strategy (MSTR) Stock Drops 7% as Company Buys $75M More Bitcoin Before Weekend Crash

TLDR

• Strategy stock dropped 7.7% in premarket trading after Bitcoin fell below $75,000 over the weekend
• Bitcoin briefly dipped under Strategy’s average purchase price of $76,037, hitting a 10-month low of $74,553
• The company bought 855 more Bitcoin tokens for $75.3 million last week despite the downturn
• Strategy now holds 713,502 Bitcoin purchased for $54.26 billion total
• Bitcoin has recovered to around $77,868, putting Strategy’s holdings at approximately $55.6 billion

Strategy stock took a hit in premarket trading after Bitcoin’s rough weekend sent the cryptocurrency tumbling below key price levels. Shares dropped 7.7% while the Nasdaq Composite fell just 0.7%.

Strategy Inc, MSTR

The world’s largest cryptocurrency touched $74,553 over the weekend. That’s a 10-month low and, more importantly, below Strategy’s average purchase price.

The company has acquired 713,502 Bitcoin tokens at an average cost of $76,052 each. That’s a total investment of $54.26 billion.

When Bitcoin hit its weekend low, Strategy’s entire position was worth just $53.1 billion. The company was underwater on its massive bet.

Bitcoin has since bounced back. The cryptocurrency trades around $77,868, a 1.1% gain over the past 24 hours according to CoinDesk.

That recovery pushes Strategy’s holdings back to approximately $55.6 billion in value. The company is slightly above water again.

Strategy Buys More Despite Price Drop

Strategy revealed Monday it purchased another 855 Bitcoin tokens last week. The company paid roughly $87,974 per token, spending $75.3 million total.

The purchase happened during the seven-day period before Bitcoin’s weekend crash. Strategy funded the buy through common stock sales.

This was a smaller acquisition than usual. The company has typically bought hundreds of millions or even billions of dollars worth of Bitcoin in recent months.

Executive Chairman Michael Saylor teased the purchase over the weekend on X. He posted a chart of Strategy’s crypto holdings with the caption “More orange.”

Saylor co-founded the company in 1989. He’s been Bitcoin’s loudest corporate cheerleader for years.

Premium Shrinks as Critics Circle

Strategy’s market multiple of net asset value stands at 1.15. That means the stock trades at a premium to the actual value of its Bitcoin holdings.

Short-seller Jim Chanos made waves in November when he disclosed his firm had exited its hedged Strategy trade. He predicted the company would eventually trade at 1.0x mNAV.

That would mean no premium at all. Just the straight value of Bitcoin on the balance sheet.

The company formerly known as Microstrategy has faced criticism throughout its Bitcoin buying spree. The recent price action has intensified that scrutiny.

Strategy’s shares fell to a multi-year low of $138.80 in premarket trading. That’s down 7.3% from the previous close.

Bitcoin’s price briefly dipping below Strategy’s cost basis marks a turning point. The company’s bet was always in the black before this weekend.

The cryptocurrency market remains volatile. Bitcoin touched lows not seen since April 2024 during the weekend sell-off.

Strategy purchased its latest Bitcoin tranche at an average price of $87,974 each, well above current trading levels around $77,000.

Strategy’s Bitcoin bet slipped into the red over the weekend before recovering slightly to put holdings at approximately $55.6 billion.

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