Strategy shares drop 30% amid Bitcoin strategy debate

Shares of Strategy (MSTR) have fallen by 30% since January 30, following the publication of executive chairman Michael Saylor’s Forbes cover story.

The stock price dropped from $340.09 to $238.25 as of March 10, with a significant 17% decline on that day alone.

The broader sell-off in tech stocks and fears of a potential recession contributed to the downturn, with the Nasdaq Composite falling over 4% on the same day.

The market's reaction comes amid growing concerns about Strategy’s aggressive Bitcoin (CRYPTO:BTC) acquisition strategy.

The company recently announced plans to raise $21 billion for “general corporate purposes,” including further Bitcoin purchases.

On February 24, Strategy added 20,356 Bitcoin to its holdings at a cost of nearly $2 billion.

Despite the falling stock price, Strategy’s Bitcoin investment remains profitable by 18.9%, with an average acquisition cost of $66,423 per Bitcoin.

Critics have questioned the sustainability of Strategy’s approach, which involves issuing stock and taking on debt to fund Bitcoin acquisitions.

Some have labeled it risky, with crypto investor Hedgex.eth describing it as a “Ponzi” due to its reliance on leverage.

Others, like Haralabos Voulgaris, have warned that future Bitcoin price declines could severely impact the company.

However, Strategy’s approach has also inspired other companies to adopt similar strategies.

For example, Metaplanet saw its share price surge by 4,800% within a year after announcing its own Bitcoin treasury strategy.

While proponents argue that Strategy’s bet on Bitcoin aligns with the asset’s long-term growth potential, critics highlight the volatility and risks associated with such a concentrated investment strategy.

At the time of reporting, the Bitcoin (BTC) price was $79,895.10.