Michael Saylor’s Strategic Bitcoin Investment Plan: Aims to Sell up to 400K MSTR Shares

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MicroStrategy, known for its daring Bitcoin investment approach, had its shares drop over 20% in January despite a 10% Bitcoin gain. Spot Bitcoin exchange-traded funds (ETFs) gave investors a direct way to invest in Bitcoin, causing this setback. This reduces MicroStrategy’s proxy investment appeal, worrying shareholders.

Michael Saylor’s Share Sell-Off: A Strategic Shift Amid ETF Approval

Adding to the complexity, MicroStrategy finds itself in an unconventional position where its Bitcoin holdings, valued at $8.7 billion, surpassed the company’s overall market capitalization of approximately $7.7 billion. This unusual scenario underscores the company’s unique reliance on Bitcoin’s fortunes, making its valuation particularly susceptible to the cryptocurrency market’s dynamics.

Furthermore, MicroStrategy’s co-founder, Michael Saylor, has engaged in a notable shift by selling company shares in the lead-up to the U.S. Securities and Exchange Commission’s (SEC) approval of ETFs directly investing in Bitcoin. Saylor sold between 3,882 and 5,000 shares from January 2 to January 10, marking the first time he has divested shares in nearly 12 years.

The sales, likely yielding more than $20 million, are part of a pre-disclosed plan that extends from January 2, 2024, to April 26, 2024, with a target to sell up to 400,000 shares during this period according to a Bloomberg report.

On the contrary, due to increased volatility following the SEC’s approval of spot-based Bitcoin ETFs, Saylor urges the Bitcoin community on X post, to resist selling their holdings. The approval has triggered a wave of selling as investors seek to capitalize on the initial price surge or free up funds for investment in Bitcoin ETFs.

You do not sell your #Bitcoin.

— Michael Saylor (@saylor) January 11, 2024

Company’s is Dwindling with Stock Decline, Investors in Split? 

In the face of this, MicroStrategy’s stock has faced a notable 23% decline since the beginning of the year, fueled by concerns that the introduction of ETFs might reduce the attractiveness of the company’s shares. MicroStrategy, previously considered a proxy for Bitcoin investments, is now navigating a changed landscape where investors have alternative options to directly invest in cryptocurrencies through ETFs.

MicroStrategy’s Ongoing Bitcoin Accumulation

Despite these challenges, MicroStrategy’s strategic shift towards Bitcoin dates back to 2020 when it sought to mitigate the impact of inflation on its cash holdings. The recent decline in the company’s stock price echoes past challenges during the crypto winter, where significant write-offs were incurred due to fluctuations in the value of its Bitcoin holdings. Nevertheless, the company’s current Bitcoin holdings have seen a substantial paper gain of approximately 40%, amounting to $8.3 billion.

Bitcoin’s recent upswing, briefly reaching over $49,000 following the debut of ETFs, injects a degree of optimism into the market. However, MicroStrategy’s ability to adapt to the evolving dynamics of the cryptocurrency landscape will likely be closely monitored by investors and industry observers in the coming months.