MicroStrategy Inc. (MSTR, Financial) experienced a significant stock drop after Citron Research, led by Andrew Left, announced on platform X that they are shorting the software company. Citron claims MicroStrategy has essentially transformed into a Bitcoin investment fund. The stock fell by as much as 10% during trading, despite an earlier surge of nearly 15%. Year-to-date, MicroStrategy has seen a remarkable 650% increase in its stock price.
Under the leadership of Chairman Michael Saylor, MicroStrategy has become synonymous with Bitcoin, investing billions into the cryptocurrency, sometimes even raising funds through debt issuance. However, with the introduction of Bitcoin ETFs, investors now have the option to invest directly in such funds without using MicroStrategy stock as a proxy.
Citron Research noted on platform X that investing in Bitcoin has become easier than ever, arguing that MicroStrategy's trading volume has deviated from Bitcoin's fundamentals. They stated, "While Citron remains optimistic about Bitcoin, we have hedged our position with a short on $MSTR."
MicroStrategy did not immediately respond to requests for comments from Bloomberg News. The surge in Bitcoin's price, which exceeded $98,000, also contributed to the fluctuations in MicroStrategy's stock. Currently, the company boasts a market capitalization exceeding $100 billion, comparable to the top 100 constituents of the S&P 500 index.
Citron is not the first to suggest shorting MicroStrategy as a hedge against Bitcoin long positions. In March, Kerrisdale Capital Management LLC made a similar recommendation.
