MSTR Stock Falls Over 5% In Tuesday Pre-Market: What's Going On?

Strategy MSTR declined 5.1% in the pre-market trading session on Tuesday after Bitcoin plummeted over 7% in the last 24 hours, according to data from Benzinga Pro.

What Happened: MSTR on Monday added nearly $2 billion worth of Bitcoin BTC/USD to its holdings, bringing its total close to 500,000 BTC.

Strategy, previously known as MicroStrategy, revealed in a regulatory filing that it has acquired an additional 20,356 Bitcoins at an average price of $97,514 per Bitcoin between Feb. 18 and Feb. 23, achieving a year-to-date BTC Yield of 6.9%.

The purchase was financed through a zero-coupon convertible note offering.

Strategy’s BTC Yield—a key metric tracking the percentage change in the ratio of bitcoin holdings to assumed diluted shares outstanding—rose to 6.9% between Jan. 1 and Feb. 23. As of Feb. 23, Strategy’s total Bitcoin holdings reached 499,096, an increase from 447,470 at the close of 2024.

Strategy’s Executive Chairman, Michael Saylor, had previously hinted at the purchase on the X platform. The company has been making weekly Bitcoin purchases since November, with the latest being the largest since December 9.

On Monday, Strategy’s shares fell by nearly 4% in late trading, but the stock still surged more than 300% over the past 12 months. Bitcoin was trading below $95,000, significantly lower than its all-time high of approximately $109,000 reached last month.

SEE ALSO: Bitcoin Plunges Below $88,000: What Is Going On?

Why It Matters: Despite the aggressive Bitcoin accumulation strategy boosting its stock market capitalization significantly, critics remain skeptical over the long-term sustainability of this approach. Influential economist and market commentator Peter Schiff criticized the company’s debt-fueled bitcoin purchases, highlighting the decline in the firm's share price and the narrowing Net Asset Value premium.

Despite Strategy’s co-founder Michael Saylor saying that his leveraged Bitcoin buys generated a yield of 6.9% this year, Schiff pointed out that the stock value has dropped by 6%. Schiff argued that the "massive dilution" has destroyed shareholder value, causing the premium to its Bitcoin holdings to collapse by 85%.

Notably, on Friday, Saylor met with the Securities And Exchange Commission’s (SEC) Crypto Task Force and discussed regulatory reforms in the U.S. while safeguarding crypto holders’ rights. He also presented his strategic Bitcoin reserve plan to the SEC aiming to create between $16 billion to $81 trillion in wealth for the US Treasury.

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