MSTR Stock Faces Renewed Downside Risks Amid Insider Sales and Market Weakness
MicroStrategy (MSTR) faces downside risks as the stock’s strategy director, Jarrod Patten, has filed a claim with the US Securities and Exchange Commission (SEC) to sell some of her company shares. This also occurs during the weakness the stock has been showing, along with more significant selling pressure throughout the equities and crypto markets.
Recent SEC filings show Patten sold 700 shares of MSTR Class A common stock, which was then valued at $96,159. This last sale is just another in a string of insider sales which have contributed to the volatility of the stock.
Previously in March, Strategy CEO Phong Le, CFO Andrew Kang, and former Executive Vice President Wei-Ming Shao sold MSTR stock worth several million dollars. Le and Kang have also been additional sellers and have aggravate market concerns about insider selling.
Subsequent trading activity is reflected in MicroStrategy’s stock activity. From January 1 to March 30, 2023, MSTR was down 61.81%, starting at $136.24 and finishing at $52.18. As a result of a general decline in the U.S. stock and cryptocurrency markets, MSTR shares closed 4.43% down to $132.96.
MSTR did worst than the average of 22 million shares traded, trading in the interval of $132.69 and $139.08. MSTR shares further declined by 2.5% in premarket trading to $129.75, erasing nearly all of the gains in the past month. Year to date MicroStrategy shares have declined by more than 15%, and over the past 12 months the stock has declined by around 60%.
Developing these events has prompted analysts to revise their pp. At Citigroup, Bernstein, and Mizuho have lowered their price targets for MSTR stock. While declines have occurred, Bernstein analyst Gautam Chhugani has reiterated a buy rating on the stock, with a 12 month price target of $450 and a focus on the long term potential of the firm.
Adding to MicroStrategy’s (MSTR) pain is the recent drop in Bitcoin, which the company holds in significant amounts on its balance sheet. Today’s Bitcoin prices have dropped 4%, due to the quarterly crypto options expiry.
The crypto is trading at $66,416 at the moment, with the last 24-hour trading range being $66,362 to $69,826. Additionally, the last 24-hour trading volume for Bitcoin has increased 21%, further confirming increased activity in the market, as well as increased trading volatility.
Insider selling, dropping cryptocurrency prices, and general market weakness have put MSTR in a position to be sold in large numbers. Continuing volatility in MicroStrategy’s stock and Bitcoin are things investors will be looking out for as it will affect the company’s performance in the short to medium term.
