MSTR stock falls in after-hours trading as bitcoin drops; SEC filing reveals new purchase

After the stock market closed on Tuesday, Strategy Inc (MSTR) experienced a decline of 4.6% in after-hours trading, causing shares to drop to $133.26. This fluctuation followed a day of volatility where stock prices ranged between $126.88 and $142.18. In tandem with this, Bitcoin also faced a downturn of 3.5%, settling around $75,772 after reaching a low of $72,971 earlier in the day. Strategy’s stock is often viewed as a proxy for Bitcoin, indicating the close relationship between the two assets in the eyes of traders, sometimes overshadowing the software aspect of Strategy’s business.

A recent SEC filing on Monday disclosed that Strategy raised $106.1 million through the sale of 673,527 shares under its at-the-market (ATM) program. With these proceeds, Strategy purchased 855 bitcoin for $75.3 million during the week concluding on Feb. 1, augmenting the company’s total bitcoin holdings to 713,502. In addition, Strategy increased the dividend rate on its variable-rate preferred stock (STRC) to 11.25% and announced a forthcoming cash dividend planned for Feb. 28.

Looking ahead, investors are keenly anticipating Strategy’s fourth-quarter results, which are scheduled to be announced after the U.S. markets close on Thursday, Feb. 5. This announcement will be followed by a webinar at 5 p.m. ET to provide further insights into the findings.

Michael Saylor, Executive Chairman of Strategy, confirmed the recent bitcoin acquisition in a tweet, stating, “Strategy has acquired 855 BTC for ~$75.3 million at ~$87,974 per bitcoin.” In response to this news, other crypto-related stocks experienced declines, with Coinbase Global falling by 4.3%, Robinhood Markets sliding by 3.1%, and the iShares Bitcoin Trust ETF dropping approximately 2.1%.

Despite renaming itself from MicroStrategy to Strategy and upkeeping the MSTR ticker on Nasdaq, Strategy has maintained various preferred stock listings. The relationship between Bitcoin and Strategy remains a focal point for investors, as fluctuations in the token’s price significantly impact the stock. The company’s continued sale of securities to finance further bitcoin purchases exposes shareholders to risks, especially regarding dilution if the share price declines.

As Thursday’s results approach, investors will closely watch for any adjustments in the pace of bitcoin acquisitions, the available capacity under the ATM program, and updates on dividend and liquidity strategies provided by the management team. The market will be closely observing these developments, as they hold the potential to influence trading trends and investor sentiment moving forward.