Since being selected for the "Nasdaq 100 Index", the price has plummeted by about 30%! Is MicroStrategy's "non-rise but fall" a sign of a bubble?

Shares of MicroStrategy (MSTR), a software company that holds a large amount of BTC, plummeted more than 8% on Monday, closing at $302.96 per share. Since the company was included in the Nasdaq 100 Index, its stock price has fallen by about 30% and has dropped more than 40% from its record high in late November.

This company, which was originally little known but has transformed into a global publicly traded company with the most BTC, is now seeing some significant short-term peak signs.

One of these signals is the soaring stock price, which reached a high of $543 per share at the end of November and is expected to increase nearly 8 times by 2024; since the company started buying BTC in August 2020, it has skyrocketed more than 50 times.

Another signal is that the founder and chairman Michael Saylor has become a frequent guest in financial media, podcasts, and community media programs this year.

Michael Saylor continues to promote the key performance indicator 'BTC Yield' (Bitcoin Yield) invented by MicroStrategy, reminiscent of the internet bubble indicators created in the late 1990s, such as page views. MicroStrategy raised a large amount of funds through the issuance of stocks and convertible bonds, and 'developed a habit' by the end of 2024, which means that they would imply an increase in BTC holdings on Sundays before formally submitting regulatory documents on Mondays.

Nowadays, many other companies are following suit. Previously, although Michael Saylor's strategy of turning BTC into a corporate reserve asset had been successful for many years, few companies followed suit except for Tesla led by Musk and Block led by Jack Dorsey. However, this situation changed significantly in 2024. Small medical device manufacturer Semler Scientific, Metaplanet, a hotel business in Japan, and some BTC miners embraced Michael Saylor's idea. Each time they announced fundraising and buying BTC, they won Michael Saylor's approval on social media platforms.

However, according to the description of the late economist Herb Stein on government budget and trade deficits, if something cannot go on forever, it will stop. Although MicroStrategy seems to have discovered its virtuous cycle in 2024, it will also face bubbles if it cannot be sustained, and this law obviously applies to MicroStrategy's stock.

After MicroStrategy announced its inclusion in the Nasdaq 100 Index on December 14, the stock price was about $430, but it plummeted by about 30% in just two weeks.

Looking back further, the bubble of MicroStrategy had a "crack" three weeks ago, when the stock price hit a new high of about $543 on November 21. Currently, MicroStrategy's stock price is $302.96 per share, which has plummeted 45% from its peak in just 5 weeks.

However, despite the pullback, the stock has still risen over 400% from the beginning of the year, roughly 20 times higher than when the company started buying Bitcoin in August 2020.

This article, which was first published in 'Block Times', is about the 30% drop in MicroStrategy's stock price since it was included in the 'NAZ 100 Index'. Is this a sign of a bubble?