The stock market had been running behind the massive rally in shares of MicroStrategy Inc. (NASDAQ: MSTR), especially as it had become common knowledge that the company’s Bitcoin holdings would bring its valuation to new highs when and if the cryptocurrency markets rallied higher. However, that euphoria was soon met with a new reality.
Investors began scrutinizing how MicroStrategy acquired Bitcoin, noting it wasn’t the cleanest approach, with shareholder dilution and increased leverage funding the purchases. While this strategy worked for a time, market efficiency eventually took hold, wiping out over 20% of the company’s market capitalization in just a week.
