Strategy Stock Plummets as MSCI Decision Approaches

Strategy Stock Plummets as MSCI Decision Approaches – What Lies Ahead for MSTR?

Strategy, previously known as MicroStrategy, has recently experienced a significant drop in its stock price, reaching a new low for the year. The company faces potential risks regarding its listing status on the MSCI index, alongside ongoing concerns about stock dilution connected to its Bitcoin purchases. Amidst these challenges, analysts are still showing optimism regarding the stock’s future potential.

Key Takeaways

Strategy's stock (MSTR) fell to a new yearly low of $155.32, a 71% decline from its high of $543 in 2024.
The potential delisting from the MSCI index raises concerns about $8 billion in stock outflows.
Ongoing dilution from MSTR stock sales to fund Bitcoin purchases pressures stock prices.
Despite these challenges, Wall Street analysts maintain bullish outlooks with significant upside targets.

Strategy MSTR stock

Strategy stock

Bearish Influences on Strategy Stock

In recent weeks, bearish sentiment surrounding Strategy's stock has been largely influenced by the risk of the MSCI index potentially delisting MSTR along with other companies holding cryptocurrency treasures. Michael Saylor, the founder of Strategy, has defended his company’s position as an operational firm deserving of retention on the global index. However, prediction platform Polymarket indicates a +75% probability of delisting by early 2026. Analysts from JPMorgan have suggested that this delisting could lead to $8 billion in stock outflows.

Some commentators have even speculated that such a move could instigate the forced liquidation of the firm's Bitcoin holdings, though market sentiment regarding a large BTC sell-off remains minimal. The MSCI's decision, anticipated in mid-January, could provide essential insights into the future direction of MSTR's stock.

Impact of Stock Dilution on MSTR

Another critical factor putting pressure on Strategy's stock price is the ongoing dilution caused by the sale of MSTR shares aimed at funding Bitcoin purchases. Analyst Novacula Occami notes that Strategy has sold $4 billion worth of MSTR shares even while its Bitcoin holdings were trading below its enterprise value, or market value, of less than one.

“Since July's announcement, they’ve issued $4.9 billion in MSTR common stock, with $4 billion of that traded at a common market value below 1 in November and December,” explained Occami.

Strategy stock Source: X

Earlier, the firm indicated it would refrain from selling MSTR shares if the market value dropped below 2.5 times; subsequently, this threshold was adjusted to just one time. Overall, in 2025 alone, Strategy has allocated $22.5 billion to acquire Bitcoin, representing almost half of its total investment of over $50 billion in BTC since 2020.

Strategy stock Source: CryptoQuant

This acquisition strategy has been financed through the sale of MSTR and preferred stock, as well as debt instruments. Remarkably, the last purchase of $108 million in Bitcoin was entirely funded via MSTR stock sales. The company currently possesses 672,497 BTC.

Nevertheless, despite the considerable price drop in 2025, many Wall Street analysts remain optimistic about MSTR stock's potential. Recently, there were 13 buy ratings, with price targets between $465 and $485, reflecting an anticipated upside of 170% to 200%.

Strategy stock Source: MarketBeat

Conclusion

As Strategy navigates uncertain waters with upcoming MSCI verdicts and persistent stock dilution, all eyes will be on the company's next steps and the larger cryptocurrency market dynamics that could affect its trajectory. Despite current challenges, there remains a level of optimism that could guide the stock towards recovery.