MicroStrategy Shares Decline Another 5% as Investor Confidence Diminishes in Saylor’s Bitcoin Strategy

Despite a brief increase in MicroStrategy's stock this week, shares fell again on Tuesday, continuing a downward trend that has persisted for months.

Key Takeaways

MicroStrategy shares declined another 5%, continuing a trend of investor skepticism.
The company recently purchased 1,287 Bitcoin, increasing its total to 673,783.
Investor confidence remains shaky due to significant unrealized losses and potential sell-off fears.
CEO Phon Le's acknowledgment of possible Bitcoin sales marks a shift in company strategy.
The outlook for 2026 is uncertain as Bitcoin prices remain volatile.

This decline follows the company's recent acquisition of $118 million worth of Bitcoin, highlighting a growing skepticism among investors regarding founder Michael Saylor’s aggressive Bitcoin acquisition strategy.

MicroStrategy Stock Drops Despite New Bitcoin Acquisition

MicroStrategy, now rebranded as Strategy, revealed on Monday that it had purchased 1,287 Bitcoin, bringing its total reserve up to 673,783 Bitcoin. This announcement came even as Bitcoin's price had seen a temporary rise following tensions between the US and Venezuela, yet the company’s share prices could not maintain their upward trajectory.

After reaching a peak of $167.24, MSTR's stock quickly fell to a low of $155 before stabilizing at $157. This failure to maintain gains, even during relatively favorable market conditions, has rekindled concerns about investor trust and the long-term viability of the company's approach. Moreover, Strategy’s overall performance has shown a steady decline since mid-2025.

Cash Reserves Fail to Alleviate Worries

According to reports from Bloomberg, Strategy recorded a staggering $17.44 billion in unrealized losses during the fourth quarter last year. Prolonged selling pressure has contributed to a nearly 50% drop in the stock price throughout 2025.

In response, the company has built up cash reserves by selling common shares, recently boosting these reserves by $62 million, bringing the total to $2.25 billion alongside their recent Bitcoin purchases. However, concerns persist that Strategy may need to liquidate some of its Bitcoin holdings if prices continue to fall. This worry is no longer just theoretical.

In late November, CEO Phon Le acknowledged for the first time that the company might have to sell its Bitcoin assets under specific crisis conditions, a notable shift from Saylor’s firm belief in "never selling" Bitcoin.

As 2026 approaches, the outlook for the company remains complicated. Strategy found some relief on Tuesday when MSCI announced that it would not remove digital asset treasuries from its index in February, yet the future of Bitcoin's pricing remains uncertain. If another significant drop in Bitcoin occurs, Strategy will surely face adverse consequences. Additionally, further increases in Bitcoin exposure could exacerbate these issues and further diminish investor confidence.