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Why is MSTU Down Today After Stock Offering

The ETF Opportunities Trust T-Rex 2X Long MSTR Daily Target ETF (MSTU) closed down 4.4% at $9.99 on January 27, 2025, as MicroStrategy's stock faced significant pressure following its announcement of a $250 million preferred stock offering. This move, aimed at funding further Bitcoin acquisitions, has raised concerns about potential dilution and new dividend obligations, impacting investor sentiment. MicroStrategy's stock fell 3.6% to $341.05, exacerbated by recent volatility in Bitcoin prices and strategic financial maneuvers, including a controversial debt call. The company's stock, which is closely tied to Bitcoin's performance, has been under pressure as traders booked profits on Bitcoin, leading to a broader sell-off in cryptocurrency-exposed stocks. The market's reaction reflects apprehension over the new dividend obligations and the potential impact on MicroStrategy's stock value, which is closely tied to Bitcoin's performance.