TechFlow news, on December 10, according to Jinshi News, data showed that in the past five weeks, MicroStrategy's average bitcoin purchase price was higher than the market price in four of those weeks. The company's stock has surged nearly 500% this year, and its issued notes have become popular among hedge funds, making it one of the most volatile stocks in the U.S. market this year.
Min Jung, analyst at Presto Research, pointed out that MicroStrategy is currently in a "positive feedback loop": rising stock prices enhance its financing capacity, enabling further bitcoin purchases, which in turn drive up bitcoin prices and the company’s valuation. However, this strategy heavily relies on continuous appreciation of bitcoin, posing significant risks.
Gracy Chen, CEO of Bitget, warned that a sharp correction in bitcoin prices could threaten MicroStrategy's debt repayment capability. The company's large holdings of bitcoin also constitute market concentration risk, potentially triggering a chain reaction.
In addition, in a filing dated October 31, MicroStrategy acknowledged that apart from revenue from its software business, the company has limited access to cash, and a significant decline in bitcoin prices could have a material adverse effect on its financial condition.
