MicroStrategy's Rollercoaster Ride: Citron Research Bets Against Bitcoin Giant

The shares of MicroStrategy experienced a steep price drop after the renowned Citron Research, led by Andrew Left, took a position against the company in a post on the social media platform X. Over time, the software firm has turned into a quasi-Bitcoin investment fund, prompting Citron to take a stance against the stock. On Thursday, the share price of MicroStrategy fell by a notable 10% during the day after having previously risen by almost 15%. Since the beginning of the year, the stock has witnessed a remarkable increase of 650%. Under the leadership of Michael Saylor, the company has become closely linked to Bitcoin after investing billions in the cryptocurrency for years. These investments have been partially financed through the sale of debt securities. With the introduction of Bitcoin ETFs, investors now have the option to invest directly in such funds instead of using MicroStrategy's shares as a substitute. According to Citron, the trading volume of MicroStrategy has decoupled from the fundamental Bitcoin values. Although Citron remains optimistic about Bitcoin, it has taken a hedging short position in MicroStrategy. MicroStrategy did not immediately respond to a query from Bloomberg News. The recent Bitcoin boom, which pushed the cryptocurrency above the $98,000 mark on Thursday, also drove the shares of MicroStrategy higher. The company now has a market capitalization of over $100 billion, making it one of the most valuable stocks in the S&P 500. Citron Research is not the first player to suggest hedging a positive Bitcoin position by shorting MicroStrategy. Back in March, Kerrisdale Capital Management pursued a similar approach. This is one of the few public positions Citron has published since the indictment of founder Andrew Left for securities fraud in July. In September, the firm reported another bet on private prisons. In October, Left filed for the dismissal of the U.S. Securities and Exchange Commission's lawsuit against him.