Why MicroStrategy shares fell 11% on Thursday

The shorts are coming MicroStrategy (NASDAQ:MSTR)and investors responded accordingly Thursday — well, at least one short seller, who wasn’t concerned about what it currently thinks of the tech company that has turnedBitcoin (CRYPTO: BTC) accumulator. As a result, MicroStrategy’s share price fell by double digits, closing more than 11% lower.

Short the shares now, says investment company

Kerrisdale Capital, an investment firm based in New York City, published a report criticizing MicroStrategy while recommending that investors go long Bitcoin.

Kerrisdale cheekily captioned the report, “Know when.” HODLKnow When to FODL,” a play on the acronym “hold on for dear life” that is a favorite among crypto investors.

The company is short on MicroStrategy and long on Bitcoin, and it has not minced words about the former. Reflecting the rising popularity of the leading cryptocurrency, MicroStrategy shares have generally been on a strong rise lately.

Kerrisdale feels uncomfortable about this and writes so

The bitcoin price currently implied by MicroStrategy stock is now over $177,000, i.e.: two and a half times the spot price of bitcoin. Long gone are the days when MicroStrategy stock provided a rare, unique way to access bitcoin.

The investment firm also pointed out that MicroStrategy’s original business, software analytics, currently represents only 3% of the company’s value.

MicroStrategy has not yet officially responded to the Kerrisdale report.

Firmly tied to Bitcoin

Short sellers often receive excessive attention because they are often scathingly critical of the stocks they short. Still, Kerrisdale makes some valid points about MicroStrategy, especially about how…

Read Complete News ➤

Benefits of eating guava for Americans