What Happened?
Shares of bitcoin development company Strategy (NASDAQ: MSTR) fell 4.4% in the afternoon session after the company paused its long-standing Bitcoin purchasing strategy to build cash reserves while Citigroup significantly lowered its price target on the stock.
Strategy sold 4.5 million shares, raising nearly $748 million and boosting its cash holdings to $2.19 billion. This move to suspend Bitcoin purchases was interpreted by observers as a defensive shift, suggesting the company was preparing for a potential downturn in the cryptocurrency market.
Adding to the pressure, a Citigroup analyst cut the firm's price target on the stock by nearly 33% to $325 from $485, although the "Buy" rating was maintained. The company's stock, which is closely linked to the value of Bitcoin, also faced headwinds as the cryptocurrency's price slid. This development followed a recent decision by MSCI not to add Strategy to a key index, which also weighed on the stock.
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What Is The Market Telling Us
Strategy’s shares are extremely volatile and have had 59 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 1 day ago when the stock gained 1.8% on the news that the price of Bitcoin, a key asset for the company, experienced notable gains.
MicroStrategy's stock performance was closely linked to the cryptocurrency market because the company held a large amount of Bitcoin. The digital currency traded around the $88,000 level following recent gains and weeks of fluctuations. Although it showed upward momentum, Bitcoin met resistance near the $90,000 mark. The price touched $89,893 before it started to decrease, but the overall positive trend appeared to lift investor sentiment for the software company.
Strategy is down 47.1% since the beginning of the year, and at $158.76 per share, it is trading 65.2% below its 52-week high of $455.90 from July 2025. Investors who bought $1,000 worth of Strategy’s shares 5 years ago would now be looking at an investment worth $4,708.
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