MicroStrategy’s Core Strategy Faces Market Reckoning

The investment thesis that propelled MicroStrategy to Wall Street fame is now facing its most severe test. Shares of the bitcoin-focused company plunged below the critical $200 threshold on Friday, establishing a new 52-week low. For the first time since early 2024, the company's market valuation has dropped below the worth of its substantial bitcoin holdings, signaling a dramatic shift in investor sentiment toward its aggressive digital asset acquisition strategy.

A significant milestone was reached as MicroStrategy's market capitalization fell beneath the value of its bitcoin treasury. The company's market-to-net-asset-value ratio (mNAV) declined to 0.977, reflecting this unprecedented situation where shares now trade at a discount to the underlying bitcoin assets. This represents a historic departure from the premium valuation investors previously assigned to the company as a leveraged bitcoin play.

The immediate catalyst came from bitcoin's own sharp correction, with the cryptocurrency breaking below the psychologically important $100,000 level to reach its lowest point since May. This downturn exposed the double-edged nature of MicroStrategy's debt-funded bitcoin acquisition strategy—while it amplified gains during bullish periods, it's now magnifying losses during the current market contraction.

Technical Breakdown and Insider Activity

From a technical perspective, the breach of the $200 support level represents a critical breakdown for MicroStrategy shares. Market analysts now identify the 200-week moving average around $138 as the next significant long-term support zone. The stock's dramatic decline included a 7.15% drop on Thursday, with the selling pressure continuing into Friday's premarket session.

Should investors sell immediately? Or is it worth buying Strategy?

The performance disparity between the company and its primary asset has become increasingly stark. While bitcoin maintains an approximate 15% gain year-over-year, MicroStrategy has surrendered more than 50% of its value over the past twelve months.

Amid the turmoil, Executive Chairman Michael Saylor moved to calm investor concerns, explicitly stating "We are buying bitcoin" and denying rumors of potential sales. He announced an update scheduled for Monday, November 17th, regarding recent acquisitions. However, these assurances were somewhat tempered by disclosure that General Counsel Shao Wei-Ming had sold approximately 10,600 shares worth about $2.58 million under a predetermined trading plan just days earlier.

The central question facing investors is no longer whether the decline will continue, but rather how much further the shares might fall before establishing a sustainable bottom.