The MSTR stock price has persisted in its recent downturn as Bitcoin fell following the company’s announcement of its latest acquisition.
Summary
- This year, the MSTR stock price has experienced a significant decline.
- Strategy acquired 1,229 Bitcoins by utilizing cash raised from share sales.
- Its mNAV multiples have dropped to an all-time low.
Dilution continues as Strategy acquires 1,229 Bitcoins
Michael Saylor’s Strategy plummeted to $156, a dramatic decrease from the year-to-date peak of $457. This marks its lowest point since last September and approximately 65% below its peak this year.
Strategy encounters challenges, with the declining Bitcoin (BTC) price posing the greatest threat. Bitcoin has fallen to $87,275, forming multiple bearish patterns that imply a potential drop to $80,000 or lower. Such a decline would adversely affect MSTR, as the company currently holds over 672,000 coins.
Another major issue for Strategy is the loss of the premium it previously enjoyed for years. Data from Bitcoin Treasuries indicates that the mNAV based on market cap has decreased to 0.778, while the mNAV based on enterprise value has turned negative for the first time.
A declining mNAV multiple suggests that the company might be undervalued, as its Bitcoin holdings exceed the entire company’s worth. However, this situation could hinder the company’s capability to raise funds through convertible bonds.
Strategy has persisted in diluting existing shareholders via its at-the-market offerings. In a statement released on Monday, the firm mentioned that it purchased 1,229 coins last week, funded by selling shares worth $108.8 million.
The company still possesses $11.6 billion it could potentially raise through share sales under the current ATM authorization, suggesting that existing shareholders may face further dilution over time. Its total outstanding shares have surged to 267 million, up from under 80 million just a few months back.
MSTR stock price technical analysis
The weekly timeframe chart illustrates that the MSTR share price has significantly declined over the past few months, with buyers remaining on the sidelines.
It formed a double-top pattern at $457 and a neckline at $234. The price has dropped below the 50-week and 100-week Weighted Moving Averages, which are on the verge of a bearish crossover.
The stock has already fallen below the 61.8% Fibonacci Retracement level, while oscillators continue to trend downward. Consequently, the most plausible forecast for Strategy stock appears bearish, with the next target set at $100.
