What's Going On With MicroStrategy Stock?

MicroStrategy Inc MSTR shares are trading lower Thursday, pulling back after rallying more than 130% over the last month. The company announced another proposed offering late Wednesday to buy more Bitcoin.

What Happened: MicroStrategy said it intends to offer $500 million worth of convertible senior notes due 2031 in a private offering to institutional buyers. The company plans to grant the initial purchasers a 13-day option to purchase up to an additional $75 million of the notes.

The rally in MicroStrategy shares has been ignited by rising bitcoin prices. Near the end of February, the company said it acquired 3,000 additional bitcoin between Feb. 15 and Feb. 25, which helped push shares higher.

Since then, MicroStrategy has continued buying bitcoin and has even announced multiple offerings to further increase its bitcoin holdings. Co-founder and executive chairman Michael Saylor has also been selling shares along the way, but his latest regulatory filing indicates that the stock sales are part of a Rule 10b5-1 trading plan adopted by Saylor on Sept. 19.

As of March 10, MicroStrategy said it held an aggregate of approximately 205,000 bitcoins at an average purchase price of approximately $33,706 per coin.

The move lower in MicroStrategy shares Thursday may also be partly due to declining bitcoin prices. Bitcoin was down more than 1% over a 24-hour period trading around $71,790 at the time of writing.

Check This Out: Bitcoin ETFs Post $684M In Net Inflows, BlackRock’s IBIT Leads The Charge

Should I Sell My MSTR Stock?

Whether to sell or hold a stock largely depends on an investor's strategy and risk tolerance. Swing traders may sell an outperforming stock to lock in a capital gain, while long-term investors might ride out the turbulence in anticipation of further share price growth.

Similarly, traders willing to minimize losses may sell a stock that falls a certain percentage, while long-term investors may see this as an opportunity to buy more shares at a discounted price.

Shares of MicroStrategy have gained 586.59% year-to-date. This compares to the average annual return of 31.94%, meaning the stock has outperformed its historical averages. Investors can compare a stock's movement to its historical performance to gauge whether this is a normal movement or a potential trading opportunity.

Investors may also consider market dynamics. The Relative Strength Index can be used to indicate whether a stock is overbought or oversold. MicroStrategy stock currently has an RSI of 84.02, indicating overbought conditions.

For analysis tools, charting data and access to exclusive stock news, check out Benzinga PRO. Try it for free.

MSTR Price Action: MicroStrategy shares were down 6.46% at $1,652 at the time of publication, according to Benzinga Pro.

Photo: 15958319 from Pixabay.