Strategy, formerly known as MicroStrategy, saw its stock drop to a fresh yearly low. Following a broader tech sell-off on the 29th of December, MSTR stock dropped by 2.15% to a record 2025 low of $155.32.
From its 2024 high of $543, MSTR has crashed by 71%, presenting several Wall Street bears with a windfall opportunity.
Although some bears began unwinding short positions in November to realize their gains, MSTR’s free fall did not slow down. At press time, the stock was back within the 2024 price range of $100-$180.
Strategy stock bearish drivers
One of the factors driving bearish sentiment over the past few weeks has been the risk of MSCI index delisting MSTR and other crypto treasury firms.
Although the Strategy founder, Michael Saylor, has defended the firm as an operational company that should remain on the global index, prediction site Polymarket was pricing a +75% chance of delisting in early 2026.
JPMorgan analysts warned that such a move would drive $8 billion in outflows from the stock.
Some even speculated that the delisting would force liquidation of its Bitcoin holdings, but market expectations for such a BTC sell-off remained low.
The MSCI decision in mid-January could offer the needed clarity for the stock’s next direction.
MSTR dilution
Additionally, the ongoing dilution through MSTR stock sales to fund Bitcoin [BTC] purchases may have contributed to the stock’s pressure.
According to analyst Novacula Occami, Strategy sold $4 billion worth of MSTR despite its BTC holdings trading below its enterprise value, or mNAV, being below 1.
“Since that July announcement, they’ve issued $4.9 billion of $MSTR common with $4 billion of that issued at a common mNAV below 1 (in Nov and Dec).”
The firm had earlier stated that it wouldn’t sell the common stock (MSTR) if the mNAV fell below 2.5x, then changed it to 1x.
Overall, Strategy has spent $22.5 billion to buy Bitcoin in 2025. This was nearly half of its +$50 billion investment in BTC since 2020.
This has been funded by MSTR and preferred stock sales, as well as debt. In fact, the latest $108 million BTC buy was wholly funded by MSTR stock sales. Strategy now owns 672,497 BTC.
That said, despite the massive dump in 2025, Wall Street analysts were still bullish on MSTR stock. There were 13 buy ratings in the past month, with price targets ranging from $465 to $485, implying a 170%-200% upside potential.
Final Thoughts
- MSTR printed fresh yearly lows at $155 following a massive dump in H2 2025.
- Still, Wall Street analysts projected a 200% upside potential for the stock.
