MicroStrategy’s stock dropped sharply on Tuesday, reflecting the decline in bitcoin prices, as the company increased its cryptocurrency holdings.
“The stock was last lower by 12%. Earlier, it fell as much as 18%,” reported sources.
This decline coincided with MicroStrategy’s acquisition of an additional 9,245 bitcoins for approximately $623 million, detailed in a filing with the U.S. Securities and Exchange Commission.
The company utilized $592.3 million from the net proceeds of a recent private offering of convertible senior notes, coupled with excess cash, to execute this purchase.
MicroStrategy had executed a similar move the prior week, acquiring 12,000 bitcoins for nearly $822 million after a debt sale, coinciding with bitcoin’s surge to record highs. The company now boasts a total bitcoin holding of 214,246, as announced on Tuesday.
Conversely, bitcoin experienced a decline on Tuesday, dipping below $63,000 at one point, marking a $10,000 drop from last week’s peak. MicroStrategy typically moves in tandem with the cryptocurrency.
The performance of bitcoin-linked stocks has been bolstered by key events such as spot bitcoin exchange-traded funds and the upcoming “halving” event scheduled for April, which halves the bitcoin mining reward to constrain supply.
Originally established as an enterprise software provider, MicroStrategy pivoted to an aggressive bitcoin-buying strategy in 2020 and has predominantly traded as a proxy for bitcoin’s value since then.
In February, the company announced its intention to pivot its focus and brand towards bitcoin development.
MicroStrategy’s stock has surged 108% this year, outpacing Bitcoin’s 50% rise. However, both experienced a downturn last week as investors sought to capitalize on profits.
