Strategy (MSTR) Stock Drops: What's Going On?

Strategy Inc Class A (NASDAQ:MSTR) shares are trading lower Monday as the company faces mounting pressure on its Bitcoin (CRYPTO: BTC) holdings. The decline comes amid a broader market pullback where approximately 10% of all Bitcoin held by traditional institutions is now sitting at unrealized losses nearing $7 billion.

Here is what investors need to know about the stock’s slide and the company’s latest move.

• Strategy stock is showing weakness. Why are MSTR shares declining?

Strategy Buys The Dip: Monday Morning Update

Despite the turbulent market conditions, Strategy announced Monday morning that it has continued its aggressive acquisition strategy. The company purchased an additional 855 BTC for approximately $75.3 million at an average price of approximately $87,974 per bitcoin.

This latest purchase brings the company’s total holdings as of Feb. 1, to 713,502 BTC, acquired for a total cost of roughly $54.26 billion. The total average purchase price has now ticked up to about $76,052 per bitcoin.

How Will Strategy Navigate This Discount Dilemma?

The new average purchase price of $76,052 places the company in a precarious position as Bitcoin trades around $77,000. The company's unrealized profit has plummeted from over $35 billion at Bitcoin’s peak to approximately $1.17 billion currently, indicating a severe impact on its financial stability.

The situation is worsened by the fact that the most recent tranche of 855 coins was purchased at approximately $87,974, well above current prices, meaning that capital is immediately underwater.

Furthermore, Strategy’s market NAV value has dropped to roughly 0.94x, meaning its stock trades at a 6% discount to the Bitcoin backing each share. This discount raises concerns about the company’s ability to issue new shares without destroying shareholder value, as its entire capital-raising strategy relies on maintaining a premium over net asset value.

How Bitcoin’s Slide Impacts MicroStrategy’s Valuation

MicroStrategy trades like a leveraged bet on Bitcoin, meaning it often crashes harder than the cryptocurrency itself because its core growth engine stops working when prices drop. The company relies on selling its own stock at a premium to buy more Bitcoin, essentially using equity to acquire cheaper assets.

However, the recent crash has pushed MSTR shares to trade at a discount, meaning the stock is currently worth less than the actual Bitcoin the company owns.

Understanding Key Support And Resistance Levels

Currently, the stock is trading 12.6% below its 20-day simple moving average (SMA) and 38.9% below its 100-day SMA, demonstrating a bearish trend. Shares have decreased by 59.28% over the past 12 months and are positioned closer to their 52-week lows than highs.

The RSI is at 40.43, which is considered neutral territory, while the MACD is below its signal line, indicating bearish pressure on the stock. The combination of neutral RSI and bearish MACD suggests mixed momentum, reflecting uncertainty in the stock’s near-term direction.

• Key Resistance: $162.50
• Key Support: $139.00

MSTR’s Business Model

Strategy is a bitcoin treasury company and a provider of business intelligence services. It is designed to provide investors varying degrees of economic exposure to Bitcoin by offering a range of securities, including equity and fixed-income instruments. The company also provides industry AI-powered enterprise analytics software.

The company’s current challenges are particularly relevant given the recent news surrounding Bitcoin’s price volatility and the impact on institutional holders.

Benzinga Edge Rankings

Below is the Benzinga Edge scorecard for Strategy, highlighting its strengths and weaknesses compared to the broader market:

• Value: 3 — The stock is trading at a steep premium relative to peers.
• Momentum: 1.47 — Stock is showing very weak performance indicators.

The Verdict: Strategy’s Benzinga Edge signal reveals a classic “High-Flyer” setup. While the Value score suggests the stock may be overvalued, the extremely low Momentum score warns that the stock is underperforming significantly—investors should exercise caution.

MSTR Shares Slide Monday

MSTR Price Action: Strategy shares were down 2.63% at $145.78 at the time of publication on Monday, according to Benzinga Pro data.

Image: Shutterstock