What Happened?
Shares of bitcoin development company Strategy (NASDAQ: MSTR) fell 11.3% in the afternoon session after the price of Bitcoin fell below $90,000 amid a broader tech-sector downturn. The drop in the cryptocurrency signaled a reduced appetite for risk among investors. Market sentiment was also dampened by a pullback in technology stocks, which was triggered by concerns over high valuations in artificial intelligence. Adding to the anxiety were worries that the Federal Reserve might pause interest rate cuts.
The shares closed the day at $186.58, down 9.6% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Strategy? Access our full analysis report here.
What Is The Market Telling Us
Strategy’s shares are extremely volatile and have had 67 moves greater than 5% over the last year. But moves this big are rare even for Strategy and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 9.1% on the news that the price of Bitcoin rebounded from recent lows, as the company disclosed another significant purchase of the cryptocurrency, reinforcing its bullish stance.
The stock recovered after falling during the previous trading session when Bitcoin's price dropped below $90,000 to a multi-month low. Strategy's value is closely linked to its large crypto holdings. Amid the market turbulence, the company's founder, Michael Saylor, announced the firm had acquired an additional 8,178 bitcoins for about $830 million. This latest purchase boosted Strategy's total holdings to 649,870 tokens. The stock's strong rally suggested investors approved of the company's decision to increase its Bitcoin position during the price dip, highlighting the share price's tight connection to the digital asset's performance.
Strategy is down 37.4% since the beginning of the year, and at $187.67 per share, it is trading 60.4% 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 $8,644.
Microsoft, Alphabet, Coca-Cola, Monster Beverage—all began as under-the-radar growth stories riding a massive trend. We’ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking.Go here for access to our full report.
