MicroStrategy's recent announcement of stock sales and Bitcoin acquisitions has stirred investor concerns, leading to a notable decline in its share price. The company disclosed in an SEC 8-K filing that it sold 710,425 shares, raising approximately $243 million, which was used to purchase 2,530 bitcoins at an average price of $95,972 per bitcoin. This move has raised eyebrows due to the high purchase price compared to the company's average Bitcoin acquisition cost of $62,691. The market's reaction seems to be driven by the dilution effect of the new share issuance and the potential risks associated with MicroStrategy's aggressive Bitcoin acquisition strategy, especially in the context of the volatile cryptocurrency market.
The Defiance Daily Target 1.75x Long MSTR ETF (MSTX) experienced a significant drop, falling 9.29% to $39.08 as of 8:20 AM on Monday, January 13.