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Short-selling firm Kerrisdale Capital released a research report on 3/28 criticizing the overvaluation of the stock price of MicroStrategy, a US-listed company known for holding a large amount of Bitcoin. Kerrisdale Capital announced that it was initiating a short position on MicroStrategy's stock. The release of the report led to a plunge of over 11% in MicroStrategy's stock price on Thursday.
In the research report, Kerrisdale Capital stated that while they were taking a bullish position on Bitcoin, they were shorting MicroStrategy's stock, believing that its stock price was overly inflated relative to the value of Bitcoin. They pointed out that the surge in MicroStrategy's stock price was closely tied to the rise in the price of Bitcoin but had resulted in an unreasonable premium.
According to Kerrisdale Capital's analysis, the implied Bitcoin price in MicroStrategy's stock price had exceeded $177,000, which is 2.5 times the current price of Bitcoin. However, they deemed it unreasonable for the stock price to pay significantly more than double the price of Bitcoin. Kerrisdale Capital also argued that with the advent of Bitcoin spot ETFs, MicroStrategy's stock was no longer the preferred way to gain exposure to Bitcoin. They noted that it had become easier to acquire Bitcoin through brokers, cryptocurrency exchanges, and low-cost ETPs and ETFs.
Kerrisdale Capital disclosed that they held long positions in Bitcoin spot ETFs from BlackRock and Fidelity. Meanwhile, MicroStrategy continued to execute its strategy of accumulating Bitcoin, currently holding 214,246 Bitcoins, accounting for 1% of the total Bitcoin supply. The cost of acquisition was $7.53 billion, and the current value of the holdings was $15.08 billion, with an unrealized gain of approximately $7.55 billion.
Following the release of the research report, MicroStrategy's stock price plummeted 14.3% intraday on Thursday to $1645.52 and closed down 11.18% at $1704.56. It is noteworthy that despite Thursday's sharp decline, MicroStrategy's stock price had surged by 169.87% year-to-date. |
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Post time 10-4-2024 20:56:00