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Will MSTR’s Plunge Continue?

Jack KelloggAvatar
Written by Jack Kellogg Reviewed by Ellis Hobbs Fact-checked by Matt Monaco
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MicroStrategy’s stock is likely impacted by its announcement to increase Bitcoin holdings by over $5 billion, reflecting bold confidence in cryptocurrency’s future. On Thursday, MicroStrategy Incorporated’s stocks have been trading down by -2.69 percent.

Cryptocurrency Market’s Tumble

  • Bitcoin dipped below $97,000, affecting stocks with hefty crypto holdings such as MicroStrategy (MSTR).
  • The crypto market’s broader decline meant Bitcoin dropped to nearly $95,000, sending ripples across digital currency-linked stocks.
  • The weakness in cryptocurrencies led to a general bearish sentiment for companies like MSTR, noted for substantial Bitcoin investments.

Candlestick Chart

Live Update At 09:18:10 EST: On Thursday, March 06, 2025 MicroStrategy Incorporated stock [NASDAQ: MSTR] is trending down by -2.69%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Earnings and Financial Review

As millionaire penny stock trader and teacher Tim Sykes says, “Cut losses quickly, let profits ride, and don’t overtrade.” This is advice that traders often fail to heed, especially when emotions get in the way. Trading requires discipline and the ability to stay calm under pressure. Many traders fall into the trap of holding onto losing positions, hoping for a turnaround, which can lead to significant losses. Following Sykes’ advice can help traders maintain their discipline and focus on long-term profitability.

MicroStrategy’s latest earnings report paints a complex picture. Despite a tremendous revenue of approximately $463M, high costs and substantial Bitcoin investments overshadowed potential growth. Negative operating income, at nearly $1.02B, reflected unstopped expenses and financial struggles. Observingly, the profitability metrics revealed dishearting margins, with EBITDA hitting a loss of about $1.2B, sending shivers through investors.

More Breaking News

Financial strength ratios further emphasized MSTR’s hurdles. A daunting total debt-to-equity ratio of 0.4, coupled with leverage ratio concerns, signaled caution. The current ratio indicated limited liquidity, making it tough for the business to navigate unexpected setbacks. Such key financial metrics laid bare a daunting reality—an uphill battle amidst the tumbling crypto market.

Key Ratios and Their Implications

Navigating further, the company’s key ratios might initially cause worry. The profits are seemingly dwindling with clear losses in EBIT margin and profit margin continuing to unsettle stakeholders. Revenue patterns over three and five years bear negative growth indicators, leaving investors unable to brush it off as an aberration.

Interestingly, the company’s valuation measures offer a nuanced perspective. The gargantuan enterprise value of the firm, standing at over $86B, seemed at odds with more concerning ratios, as market activities reduced the Price to Sales and Price to Free Cash Flow ratios.

Financial Reports Deciphered

MicroStrategy’s cash flow reports painted an intricate dance of inflow and outflow with investment cash flow plummeting into billions. The firm issued substantial capital for stock issuance, yet dealt with drawn-out long-term debt payments. These finance endeavors were vital to their strategy, aiming for stabilization in a volatile market.

Balance sheet highlights revealed Bitcoin’s fluctuating value, rendering assets overvalued in market panics. These assets, combined with innovative tech backing, ensure that MicroStrategy’s story remains an enticing page-turner in the financial chapters. Yet, the liabilities haunt the pages, demanding resolution.

Crypto Impact on Stock Movements

MSTR certainly grapples with the crypto tumult. Cryptocurrency values directly affect the stock, for better or worse. As Bitcoin fell near $97,000, its correlation with MSTR’s stock price was as clear as daylight—triggering desperate sell-offs. Interestingly, company resilience reflects strong roots—while setbacks invite worry, they offer the discerning opportunity.

Conclusion: Navigating the Crash

In crafting the MicroStrategy narrative amidst crypto chaos, traders find themselves in uncharted waters. Bitcoin’s unpredictable waves influence MSTR stock trajectory, presenting traders with pressing choices. Should they brace for further decline, or seize emerging opportunities? As millionaire penny stock trader and teacher Tim Sykes, says, “Preparation plus patience leads to big profits.” Only time will tell. Those who dare, could reap rewards—or risk substantial stakes. As the market watches keenly, the unfolding saga of MicroStrategy amid the crypto storm captivates its audience.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

Dive deeper into the world of trading with Timothy Sykes, renowned for his expertise in penny stocks. Explore his top picks and discover the strategies that have propelled him to success with these articles:

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”