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

BTC-USD +2.05% MSTR +0.92% STRC +0.82% STRD +0.91% STRF +0.67%

Quick Read

• MicroStrategy (MSTR) trades 20% below its 200-day moving average as Bitcoin fell 16.6% from $104,050 to $86,774.

• MicroStrategy created a $1.4B reserve for future dividend and interest payments amid fears of forced asset sales.

• The company holds $8.22B in total debt against just $54.3M in cash.

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Shares of MicroStrategy (NASDAQ:MSTR) are trading 20% below their 200-day moving average of $332.74, coinciding with a sharp deterioration in retail investor sentiment. Reddit discussions have turned decidedly bearish, with sentiment scores falling to 28 out of 100 in early December. The shift comes as Bitcoin dropped 16.6% from its mid-November peak of $104,050 to current levels around $86,774, putting pressure on MicroStrategy's $56 billion cryptocurrency holdings.

The company announced today it had created a $1.4 billion reserve to fund future dividend and interest payments, a defensive move aimed at calming fears that further Bitcoin declines could force asset sales. With a beta of 3.37, MicroStrategy amplifies crypto volatility by more than three times, meaning Bitcoin's slide has hit the stock even harder.

Reddit Traders Eye Puts as Leverage Concerns Mount

A single post on r/options has dominated MicroStrategy discussion for 48 hours, drawing 51 upvotes and 46 comments. The author wrote: "With BTC pulling back hard, I'm wondering if now's the time to go after MSTR with puts. The company's been super aggressive with leverage and holds a huge amount of bitcoin. If BTC drops further, say toward 74K, I feel like MSTR's balance sheet could start to look pretty shaky."

The post continues: "I know MSTR has been a beast on the way up, but the leverage they're using feels like it could cut both ways. Anyone else thinking about this trade, or am I missing something obvious?" Comments on the thread echoed similar concerns, with one user noting: "The leverage is insane. If BTC keeps dropping, MSTR could get margin called or forced to liquidate holdings at the worst possible time."

Would it be a bad idea to buy puts on MSTR? by u/Sepirus_ in options

The bearish tone reflects growing unease about three specific risks:

• MicroStrategy carries $8.22 billion in total debt against just $54.3 million in cash

• The company's RSI hit 28.21 on December 1, marking 14 consecutive trading days in oversold territory

• Core software business revenue of $474.9 million supports a $49.26 billion market cap, creating a price-to-sales ratio of 103.71x

Wall Street Holds, Retail Bails

Despite the Reddit negativity, 13 of 14 Wall Street analysts rate MicroStrategy a Buy or Strong Buy with an average price target of $517.21. Trading volume spiked on December 1 as Bitcoin saw 16,664 BTC change hands, well above typical daily volumes. Investors should monitor Bitcoin's ability to hold above $85,000 and whether the new $1.4 billion reserve proves sufficient if crypto selling accelerates.

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