MicroStrategy shares dropped 16% to $397.28 after Citron Research announced a short position against the company while holding a long position in Bitcoin. Concerns arose regarding MicroStrategy’s valuation, which has been perceived as excessively high, especially as Bitcoin approaches $100,000. This decline erased approximately $20 billion in market value after hitting an intraday record of $543. MicroStrategy has become the second most actively traded stock on the Nasdaq, just behind Nvidia. Despite a 500% increase in stock value this year, surpassing Bitcoin's 110% gain, analysts warn that the company's heavy reliance on Bitcoin investments may pose a risk if Bitcoin's price declines. MicroStrategy currently holds 331,200 BTC, valued at about $32 billion, while its market cap stands at $107 billion, showcasing a significant valuation premium over its Bitcoin assets. The company continues to engage in aggressive capital raising to purchase more Bitcoin, which analysts indicate may lead to increased scrutiny over its stock price against Bitcoin fundamentals.

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