MicroStrategy Stock Faces Pressure After Citron Research Reveals Short Position: Retail Sentiment Plunges
By Stocktwits Inc | First Published Nov 21, 2024, 10:01 PM ISTWhile Citron remains bullish on Bitcoin itself, the firm criticized the disconnect between MicroStrategy’s stock price and Bitcoin’s fundamentals, arguing that $MSTR has become overheated.
Shares of MicroStrategy Inc. ($MSTR) attracted significant attention among investors on Stocktwits Thursday, becoming the platform’s top trending symbol after short-seller Citron Research revealed it had taken a short position on the stock.
The enterprise software company, known for its aggressive Bitcoin investment strategy, has emerged as the largest publicly listed corporate holder of Bitcoin ($BTC.X).
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The move came as Bitcoin itself hit a record high of around $98,000 early Thursday, before dipping slightly to $96,565 following news that President-elect Donald Trump plans to nominate crypto-friendly Howard Lutnick as his commerce secretary.
Additionally, the Nasdaq began allowing options trading on BlackRock’s iShares Bitcoin ETF ($IBIT) for the first time.
MicroStrategy’s bet on Bitcoin began in 2020 when the company made the cryptocurrency its primary treasury reserve asset.
At the time, Citron Research supported the strategy, setting a target of $700 for the stock.
However, in a post on X (formerly Twitter) on Thursday, Citron noted how MSTR’s stock price has surged to over $5,000 per share (split-adjusted) in the years since, far outpacing Bitcoin’s own price growth.
“Now, with Bitcoin investing easier than ever (ETFs, $COIN, $HOOD), $MSTR’s volume has completely detached from BTC fundamentals. While Citron remains bullish on Bitcoin, we’ve hedged with a short $MSTR position. Much respect to @saylor, but even he must know $MSTR is overheated,” Citron said.
On Stocktwits, sentiment surrounding $MSTR plunged to ‘extremely bearish’ (7/100) levels — the lowest score in a year — amid a surge in message volume.
A poll on the platform showed that 59% of retail investors now believe $MSTR’s valuation is in “bubble territory,” with just 17% considering it “fair, tied to BTC.”
The stock initially surged by as much as 12% in premarket trading Thursday, but reversed course during regular session hours, falling as much as 5%, before emerging back in the green.
MicroStrategy’s stock has gained an impressive 580% so far this year, significantly outperforming broader market indices and even Bitcoin.
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