What Happened?

Shares of business analytics software company MicroStrategy (NASDAQ:MSTR) jumped 15% in the afternoon session after the company announced the pricing of a new private offering of $2.6 billion in convertible senior notes due in 2029. MicroStrategy intends to use the net proceeds from the issuance to accelerate its Bitcoin purchases. When examining the relationship between MicroStrategy's stock price and the rising price of Bitcoin, it remains unclear whether the stock influences Bitcoin's improved price momentum or vice versa. However, the market's reaction suggests that optimism remains strong in light of the company's ongoing Bitcoin acquisition strategy.

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What The Market Is Telling Us

MicroStrategy’s shares are extremely volatile and have had 90 moves greater than 5% over the last year. But moves this big are rare even for MicroStrategy and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 9 days ago when the stock gained 22% on the news that the company added to its Bitcoin position, increasing its overall exposure to the cryptocurrency market amid improving market sentiment fueled by hopes of favorable regulations and policies supporting the crypto industry.

MicroStrategy announced it bought 27,200 bitcoins at an average price of $74,463 per bitcoin between October 31, 2024, and November 10, 2024.

MicroStrategy is up 606% since the beginning of the year, and at $484.69 per share, has set a new 52-week high. Investors who bought $1,000 worth of MicroStrategy’s shares 5 years ago would now be looking at an investment worth $31,457.

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