Citron Shorts MicroStrategy, Sparks Sharp Selloff Despite Positive Bitcoin Sentiment

MicroStrategy tumbles as Citron shorts the stock, citing divergence from Bitcoin fundamentals

6 days ago

Summary

MicroStrategy shares drop after Citron's short position, citing "overheated" valuation and BTC fundamentals divergence.

After Citron Research disclosed a short position in the stock, claiming it is "overheated," MicroStrategy (MSTR, Financial) shares fell dramatically to $397.28 on Thursday, reversing earlier gains.

Activistic short seller Citron observed on social networking site X that it had suggested MicroStrategy almost four years ago as a main vehicle for Bitcoin (BTC) investment, assigning a $700 price target at the time

However, following the stock's superb run-up, Citron contended that trading activity for the stock deviates from BTC principles. The company cited the growing availability of direct cryptocurrency investments through ETFs and platforms like Coinbase (COIN, Financial) and Robinhood (HOOD) as reasons MicroStrategy is less necessary for BTC exposure.

Citron said it had hedged its perspective with a short position against MicroStrategy, even though it maintained a positive outlook on BTC. Supported by robust investor attitude toward BTC markets, MicroStrategy shares remain up 78% from Election Day and have gained 529% YTD despite Thursday's selloff.

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