Strategy (MSTR Stock) Sentiment Is Sinking Faster Than Bitcoin on The Titanic

Shares of MicroStrategy (NASDAQ:MSTR) are trading 20% beneath their 200-day moving mean of $332.74, coinciding with a crisp deterioration successful retail capitalist sentiment. Reddit discussions person turned decidedly bearish, with sentiment scores falling to 28 retired of 100 successful aboriginal December. The displacement comes arsenic Bitcoin dropped 16.6% from its mid-November highest of $104,050 to existent levels astir $86,774, putting unit connected MicroStrategy's $56 cardinal cryptocurrency holdings.

The institution announced contiguous it had created a $1.4 cardinal reserve to money aboriginal dividend and involvement payments, a antiaircraft determination aimed astatine calming fears that further Bitcoin declines could unit plus sales. With a beta of 3.37, MicroStrategy amplifies crypto volatility by much than 3 times, meaning Bitcoin's descent has deed the banal adjacent harder.

A azygous station connected r/options has dominated MicroStrategy treatment for 48 hours, drafting 51 upvotes and 46 comments. The writer wrote: "With BTC pulling backmost hard, I'm wondering if now's the clip to spell aft MSTR with puts. The company's been ace assertive with leverage and holds a immense magnitude of bitcoin. If BTC drops further, accidental toward 74K, I consciousness similar MSTR's equilibrium expanse could commencement to look beauteous shaky."

The station continues: "I cognize MSTR has been a beast connected the mode up, but the leverage they're utilizing feels similar it could chopped some ways. Anyone other reasoning astir this trade, oregon americium I missing thing obvious?" Comments connected the thread echoed akin concerns, with 1 idiosyncratic noting: "The leverage is insane. If BTC keeps dropping, MSTR could get borderline called oregon forced to liquidate holdings astatine the worst imaginable time."

Would it beryllium a atrocious thought to bargain puts connected MSTR?
by
u/Sepirus_ in
options

The bearish code reflects increasing unease astir 3 circumstantial risks:

• MicroStrategy carries $8.22 cardinal successful full indebtedness against conscionable $54.3 cardinal successful cash

• The company's RSI deed 28.21 connected December 1, marking 14 consecutive trading days successful oversold territory

• Core bundle concern gross of $474.9 cardinal supports a $49.26 cardinal marketplace cap, creating a price-to-sales ratio of 103.71x