MicroStrategy stock price crashes to $170! Saylor responds with four words: Never Backing Down

MicroStrategy Hit by Bitcoin Crash, MSTR Closes at $170.50 on November 21. MicroStrategy founder and executive chairman Michael Saylor summed up his stance in four words: “I will never back down.” Last week’s “HODL or Not This Week” poll showed 77.8% of respondents insisted on holding Bitcoin and not selling.

The $56 Billion Bet Behind MicroStrategy’s Four-Word Mantra

Saylor’s brief statement, “I will never back down,” was released just hours after MicroStrategy’s weekly poll showed 77.8% of respondents claimed they “held on” to Bitcoin during the recent sell-off, confirming that the Bitcoin community still views this drop as a temporary setback rather than a strategy ender. Of the 133,156 poll participants, 77.8% voted not to sell, while only 22.2% voted to sell.

MicroStrategy holds 649,870 Bitcoins, the largest Bitcoin holding among public companies worldwide. With an average cost of $74,430, this means that even if Bitcoin’s price drops to around $86,000, the position still maintains a 16.67% profit. According to Bitcoin Treasuries data, the value of MicroStrategy’s Bitcoin holdings peaked at nearly $80 billion on October 7. Dropping from $80 billion to $56 billion means a $24 billion paper loss, but Saylor’s stance remains resolute.

This week, Bitcoin’s price fell to $80,600, erasing more than 30% of gains since October and triggering billions of dollars in forced liquidations. Critics, including Peter Schiff, questioned MicroStrategy’s leverage, valuation, and survivability. Saylor’s response remains unchanged: capital drawdowns are irrelevant, the company’s mission is unchanged, and in his view, even larger drawdowns can be handled without changing course.

Historically, MicroStrategy would usually disclose new Bitcoin purchases the day after Saylor posted Bitcoin Tracker updates. This time he simply posted “I will not yield,” suggesting further Bitcoin purchases may be coming, but no Tracker info has been released yet, possibly indicating the company is waiting for a better buying opportunity or arranging new financing tools.

MSTR Plunges 40%, Market Cap Falls Below Value of Bitcoin Holdings

(Source: Google Finance)

However, MicroStrategy’s stock price has been under pressure. MSTR dropped to around $170, almost erasing all its previous premium over its Bitcoin holdings, and its net asset value multiplier has hit its lowest level since the early days of its Bitcoin treasury experiment. According to Yahoo Finance, over the past month, MicroStrategy’s stock price plunged 40% to $170.50, a drop larger than Bitcoin’s decline from its all-time high.

More seriously, MicroStrategy’s market cap has now fallen below the value of its Bitcoin holdings—a “negative premium” that is extremely rare. Typically, MicroStrategy’s share price trades at a premium, as investors are willing to pay extra for its unique Bitcoin exposure. But when the stock drops so far that its market cap falls below its net Bitcoin value, it signals a severe loss of market confidence.

This negative premium limits MicroStrategy’s financing ability. Historically, MicroStrategy has issued common stock to buy more Bitcoin, but as that approach’s benefits have waned, it turned to issuing preferred shares with dividends. When the stock price is below net asset value, issuing new shares further dilutes existing shareholders, making this financing method impractical. That’s why Saylor’s “never back down” message is so important right now—he needs to stabilize investor confidence and avoid a further selling spiral.

MSCI Index Removal Crisis and Saylor’s Rebuttal

Michael Saylor on Friday downplayed concerns that MicroStrategy may be excluded from some stock indices next year. On October 10, MSCI announced it was discussing how to handle crypto-financial companies, “including companies that primarily use financing activities to accumulate digital assets,” as well as those “with digital asset holdings accounting for 50% or more of total assets.” MSCI will announce its decision on January 15.

JPMorgan highlighted MSCI’s consultation on crypto asset-buying companies in a report. On X, Saylor compared MicroStrategy’s business model to investment funds. “MicroStrategy is not a fund, not a trust, nor a holding company,” Saylor said. “We are a publicly traded operating company with a $500 million software business and a unique capital management strategy that treats Bitcoin as productive capital.”

Three Key Features of MicroStrategy Emphasized by Saylor

Operating Company, Not an Investment Vehicle: Owns a $500 million software business with real revenue and customers

Innovative Financing Capability: Launched a variety of financial products, including preferred shares and convertible bonds, showcasing capital market innovation

Bitcoin as Productive Capital: Treats Bitcoin as part of the corporate balance sheet, not just speculation

At the X conference, Saylor highlighted MicroStrategy’s product launches this year and how they reflect the company’s aim to build “a structurally financed company backed by Bitcoin, capable of innovating in both capital markets and software.” Additionally, Saylor stated the company’s commitment to Bitcoin is unwavering and that “index classification does not define” the world’s largest corporate Bitcoin holder.

MicroStrategy was added to the tech-heavy Nasdaq 100 at the end of last year. At the time, Bloomberg ETF analyst James Seyffart estimated this milestone would bring $2.1 billion in net buying to MicroStrategy stock. In September, MicroStrategy qualified for S&P 500 inclusion, but as a Bitcoin-trading company, it was passed over. If removed from MSCI, it could trigger large-scale passive fund selling and further pressure the stock price.

Market Confidence Test and Outlook

(Source: Myriad)

In Myriad’s prediction market, only 6% of respondents believe MicroStrategy will sell Bitcoin this year. This figure reflects the community’s trust in Saylor’s commitment but also hints that if the company is ever forced to sell, it would have a massive market impact. Critics point out that MicroStrategy’s business model is essentially a leveraged bet on Bitcoin: when Bitcoin’s price rises, the company can issue stock at a premium to buy more Bitcoin, creating a positive cycle. But when the share price falls below net asset value, the cycle reverses and the company may face financing difficulties.

Saylor’s “never back down” mantra is a direct response to market panic and a renewed declaration of his long-term conviction. This isn’t the first time he has sent a similar message during market downturns; he did the same during the 2022 bear market, sticking to buying. This steadfast position has won him high status in the Bitcoin community but also makes MicroStrategy an amplifier of Bitcoin price volatility.