What Happened?

Shares of bitcoin development company Strategy (NASDAQ: MSTR) jumped 2.7% in the afternoon session after the company disclosed it had purchased an additional 390 Bitcoin for approximately $43.4 million. 

The acquisition, which took place between October 21 and October 26, increased Strategy's total holdings to 640,808 BTC, solidifying its position as the largest corporate holder of the digital asset. According to a company filing, the purchase was financed without issuing new common stock, which prevented the dilution of existing shareholders' ownership. This latest move reinforced the company's strategy of using its balance sheet to acquire Bitcoin, a tactic that has made its stock a popular proxy for investors seeking exposure to the cryptocurrency's price movements.

The shares closed the day at $295.67, up 2.3% from previous close.

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What Is The Market Telling Us

Strategy’s shares are extremely volatile and have had 68 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 5 days ago when the stock dropped 5% on the news that the price of Bitcoin retreated, dragging several cryptocurrency-tied stocks along with it. The drop in Bitcoin's price, from nearly $112,000 to around $108,000, directly impacted companies with significant crypto holdings. Strategy, which operates like a Bitcoin treasury firm, saw its shares decline alongside other crypto-linked stocks like Coinbase and MARA Holdings. This move occurred during a broader sell-off in technology shares that affected global markets.

Strategy is down 1.7% since the beginning of the year, and at $294.87 per share, it is trading 37.8% below its 52-week high of $473.83 from November 2024. Investors who bought $1,000 worth of Strategy’s shares 5 years ago would now be looking at an investment worth $16,794.

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