MSTR Tumbles as Saylor Shifts Strategy, Dilution Fears Mount
MSTR Stock Plummets Amid Policy U-Turn
MicroStrategy (MSTR) shares took a hit on August 19, dropping 7% after Executive Chairman Michael Saylor announced plans for further equity dilution. This marks a reversal of the company's previously stated mNAV policy. The MSTR stock price reached a four-month low, closing at $336 on Tuesday, prompting some investors to exit their positions.
Investor Backlash Over Dilution Plan
The market's reaction stems from Saylor's shift on stock dilution, specifically below the 2.5x mNAV threshold. The mNAV for MSTR stock has fallen from 3.63x in November 2024 to 1.6x. Saylor has stated that this move is necessary as MicroStrategy seeks additional capital for Bitcoin acquisitions.
Josh Mandell, a vocal MSTR investor, publicly announced his decision to sell his holdings, accusing Saylor of dishonesty regarding the equity dilution promise. Mandell criticized Saylor for breaking his commitment not to dilute MicroStrategy’s stock below a certain threshold, except for covering interest and dividend payments.
"Please stop asking me if or why I sold $MSTR at 1.5 mNAV. You just don’t seem to get it. I actually bought above here and then Saylor sold. He said they wouldn’t … and then he did. I am announcing that I will not speak in support of anything that man does again".
Ripple CTO David Joel Katz Schwartz has also voiced concerns, cautioning investors about holding MSTR stock should Bitcoin face further pullbacks. He also criticized what he alleges are attempts by the company to silence negative opinions surrounding Michael Saylor's Bitcoin-buying strategy.
Concerns have also surfaced among MicroStrategy employees, with some expressing disappointment and demoralization on platforms like Glassdoor.
During Q2, asset management firm Vanguard reportedly reduced its stake in MicroStrategy by 10%, reflecting investor unease amidst the stock's recent struggles.
Analyst: MSTR Stock Could Target $300
The recent 7% drop has led to MSTR stock breaching a key support level at $360. According to technical analysis, the next support level to watch is $300. This decline could further diminish MicroStrategy's premium over Bitcoin, making future stock dilutions increasingly challenging.
