Retail Investors Face Losses on MSTR as MicroStrategy Shifts Momentum

MicroStrategy’s shares have plunged nearly 40% from their peak of just over $540, leaving retail investors reeling.

Disclaimer: The author of this analysis holds a position in MicroStrategy (MSTR).

In 2024, MicroStrategy (MSTR) has been a major focus in the market, with its stock soaring 416% year-to-date and hitting a staggering 600% gain at its peak just last week.

The tide turned on November 21, however, when a short report from Citron Research triggered a massive sell-off. The stock has since dropped almost 40%, coinciding with Bitcoin’s 10% slide from near $100,000 to $90,000.

Retail investors were heavily involved in the lead-up to the decline. According to The Kobeissi Letter, retail investors poured a record $42 million into MicroStrategy shares on November 20, marking the largest single-day retail buy on record and dwarfing October’s daily average by eightfold. Over the past week, retail investors invested nearly $100 million in the company’s stock.

The decline in MicroStrategy’s share price has sharply reduced its net asset value (NAV) premium. With a market cap of $75 billion and 386,700 Bitcoin holdings valued at $36 billion, the company’s NAV premium now stands at just 2.09, the lowest level in months.

Trading activity has also reached extraordinary levels. Last week, MicroStrategy saw $136 billion in trading volume—setting a new benchmark even higher than the wildest week of the GameStop (GME) saga in 2021.

“MicroStrategy’s trading volume last week dwarfed even the most active week of GameStop mania,” noted Eric Balchunas, Senior Bloomberg Analyst. “For comparison, not even Amazon (AMZN) has ever experienced such a level of activity.”