Earlier this year PayPal and MicroStrategy made huge news by being leaders in putting part of the company cash reserves in Bitcoin. Initially, it was huge news on Wallstreet but neither of the companies was punished at the time. This news allowed Graystone's Bitcoin Trust to take center stage and explode in value. While institutional investors have begun to a lot part of their portfolio into cryptocurrency and Bitcoin in particular.
For the most part, I use crypto as a passive means of income and research a ton to figure out what projects I like to invest in in the future. I am heavily involved in the stock market though as I grew up in a household where my father was a stock trader. It came as a huge surprise though to see a stock get a double downgrade. This is a rare occurrence as normally most stocks either get upgraded or downgraded by one level or another. When MicroStrategy announced they were raising more capital to but even more Bitcoin an analyst covering them from CITI hit them with a double downgrade to sell.
Even though Microstrategy was easily able to raise the money and actually bumped up the number by $100 million to $650 million the stock was still hammered by this downgrade. Personally, it appears to me that Wallstreet is trying to fight back and reel in companies moving to crypto as this is something they do not control. With many traders following ratings companies getting hit with sells will drive the price down and punish them.
It's disappointing to see this reaction. Further, it serves as a cautionary tale to future companies that raise money to buy cryptos. With the news coming out about how successful the company was at raising money it will be interesting to see how the stock responds Monday when stock trading resumes. I will be interested to see how the experts respond to this and what they now say about the stock. The success could prevent other analysts from knocking the stock to a sell but only time will tell.
