MicroStrategy Is Buying the Bitcoin Dip. Should You Buy the Dip in MSTR Stock?

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His leadership of Strategy (MSTR), formerly MicroStrategy, has resulted in a marked shift from the company's previous core focus (the software industry) to becoming a fully entrenched Bitcoin treasury company. This move has led to a massive surge in the company's share price in recent years, as the chart below shows.www.barchart.comHowever, one thing investors will also note about the move we've seen in MSTR stock in recent years is that lately, the stock has been moving in the wrong direction. In fact, zooming in over the past year, shares of MSTR stock have dropped roughly 34% from the start of the year and are down more than 60% from their peak right around one year ago.Nvidia's Earnings Report Will Be Out on Wednesday, Nov. 19 - How to Play NVDA StockElon Musk Warns ‘The Only Way to Get Us Out of the Debt Crisis’ and ‘Prevent America from Going Bankrupt is AI and Robotics’NVDA Earnings, FOMC and Other Key Things to Watch this WeekMarkets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines.There are many reasons for this, including calls from billionaire hedge fund managers to short the stock, given its previous massive dislocation between its mNAV (its net asset value) and the actual value of the Bitcoin on Strategy's books. This premium has since dissipated to around 1.1 from around 2 at its peak, so there have been some recent indications that various short-sellers have closed out their bearish bets on this stock.So, why is MSTR stock continuing to decline? Let's dive in.The price of Bitcoin matters a great deal to a company like Strategy. That's because this entire business' underlying model is relatively simple: use preferred debt and equity issuances (issuing shares) to buy Bitcoin and sit on this Bitcoin. In other words, the company is borrowing money using its Bitcoin as collateral, but there aren't the kind of growing cash flows typically associated with such businesses to support its debt position over the long term.www.barchart.comWhat this has led to is some rather intriguing fundamentals (shown above). And as Strategy CEO Michael Saylor recently pointed out, he's still in buying mode (perhaps in an even more aggressive fashion than in the past), suggesting that any sort of meaningful price decline in Bitcoin could force Saylor to sell some of his Bitcoin hoard.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,644.50 +4.75 (+0.07%)Dow Futures46,197.00 +13.00 (+0.03%)Nasdaq Futures24,607.00 +11.25 (+0.05%)Russell 2000 Futures2,358.50 +2.80 (+0.12%)VIX24.69 0.00 (0.00%)Gold4,087.50 +21.00 (+0.52%)PortfolioSign in to access your portfolioSign inTop gainersONDS Ondas Holdings Inc. 7.84 +1.59 (+25.34%)DGNX Diginex Limited 16.20 +2.61 (+19.21%)LGN Legence Corp. 44.93 +4.81 (+11.99%)TMC TMC the metals company Inc. 5.42 +0.54 (+10.95%)SRRK Scholar Rock Holding Corporation 39.81 +3.34 (+9.14%)Top losersNICE NICE Ltd. 105.65 -15.21 (-12.58%)KLAR Klarna Group plc 31.63 -3.25 (-9.32%)PACS PACS Group, Inc. 14.43 -1.27 (-8.09%)SNDK Sandisk Corporation 244.93 -20.95 (-7.88%)GPCR Structure Therapeutics Inc. 34.50 -2.94 (-7.85%)Most activeNVDA NVIDIA Corporation 181.36 -5.24 (-2.81%)ONDS Ondas Holdings Inc. 7.84 +1.59 (+25.34%)PLUG Plug Power Inc. 2.1400 +0.0550 (+2.64%)OPEN Opendoor Technologies Inc. 7.52 -0.32 (-4.08%)BBAI BigBear.ai Holdings, Inc. 5.98 +0.41 (+7.36%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersPLUG Plug Power Inc. 2.1400 +0.0550 (+2.64%)TMC TMC the metals company Inc. 5.42 +0.54 (+10.95%)OLMA Olema Pharmaceuticals, Inc. 20.14 +11.62 (+136.39%)NET Cloudflare, Inc. 196.53 -5.72 (-2.83%)HD The Home Depot, Inc. 336.48 -21.55 (-6.02%)Top economic events