Strategy Stock Slumps as Share-Sale Flexibility Alarms Investors

Strategy Inc.’s stock MSTR is facing a downward trajectory, stumbling on August 19 to reach its lowest point in four months. The decline came after the company revealed a policy change that will allow it to sell new shares more freely to reach its Bitcoin (BTC) goals . The move, while designed to give the firm greater financial flexibility, has unsettled investors who see it as a sudden reversal of earlier promises. Strategy Inc’s MSTR Hits Four-Month Low The stock’s sharp decline reflects a swift shift in investors’ sentiment. Recent Google Finance data revealed that MSTR closed at $336.57, down 7.43% on the day. This is before slipping another 0.76% in after-hours trading. This marks the weakest close since April 21. The drop also reflects how closely the company’s fate is tied to the flagship crypto. Only weeks ago, Strategy’s stock traded as high as $455.90 during Bitcoin’s bullish rally. Now, with Bitcoin slipping to around $113,000, pressure has grown on Strategy’s approach, causing many investors to lose confidence. Strategy’s New Shares Policy Update Faces Backlash The spark for Tuesday’s selloff follows an announcement from co-founder Michael Saylor. In a recent X post , Saylor explained that Strategy had updated its Equity ATM Guidance, a framework governing when it can issue new shares. He added that this change is aimed at providing greater flexibility in executing the company’s capital markets strategy. The update will allow Strategy to issue new shares even when MSTR trades under 2.5 times its net asset value (NAV). Previously, the company said it would not issue stock below this level, except to pay debt interest or dividends. The new guidance now states the company can issue MSTR shares to pay debt interest, fund preferred equity dividends, and when it believes the move benefits the company. Not all shareholders welcomed the news. Many accused the Virginia-based firm of going back on its word. On July 31, Strategy’s earnings call reassured holders that no issuance would occur below 2.5x NAV, except in specific cases. Investors argue that the move introduces uncertainty about how management plans to balance its Bitcoin ambitions with shareholder trust. Ripple Effects Across the Crypto Sector MicroStrategy’s stumble came during a difficult trading day for the broader crypto sector. Several high-profile companies in the crypto sector also recorded sharp losses . Robinhood’s HOOD dropped 6.54% to $107.50, with a further 1.23% decline after hours. Coinbase Global’s stock value slid 5.82%, while Galaxy Digital posted one of the steepest losses, falling 10.06%. Shares of Bullish, a publicly traded crypto exchange , fell 6.09% to $59.51 and slipped an additional 3.24% after hours. Circle also came under pressure, dropping 4.49%. The broader market was not immune to the struggle either, with the Nasdaq Composite closing down 1.46%, highlighting a risk-off mood among investors. The post Strategy Stock Slumps as Share-Sale Flexibility Alarms Investors appeared first on TheCoinrise.com .