The Defiance Daily Target 1.75x Long MSTR ETF (MSTX) closed down 6.98% at $43.97 on January 28, 2025, as MicroStrategy's stock faced significant pressure following the announcement of a new stock offering. MicroStrategy's Executive Chairman, Michael Saylor, revealed plans for a new series A perpetual strike preferred stock, STRK, which will eventually convert into more shares of MSTR. This move is expected to increase the supply of MSTR shares, contributing to dilution concerns among investors. The market reacted negatively to the news, as the potential for increased supply could weigh on MSTR's share price. Over the past year, MicroStrategy's market cap has surged by 1,000%, while its share price has only increased by 600%, highlighting the impact of dilution from financial engineering. The introduction of STRK adds another layer to this dynamic, as it competes with existing MSTR shares and could further inflate the supply.