Bitcoin News Today: MicroStrategy's Flywheel Stalls: Bitcoin Buying Can't Lift Plummeting Stock

MicroStrategy's (MSTR) aggressive Bitcoin accumulation strategy and leveraged capital structure have placed it in a precarious position as market volatility and index inclusion uncertainties weigh on its stock. The company, which has staked its reputation on becoming a corporate Bitcoin leader, recently added 8,178 BTC for $835.6 million amid a market dip, bringing its total holdings to 649,870 BTC, valued at approximately $48.37 billion. However, its stock price has plummeted nearly 60% from its July peak, trading at $186 as of November 17, 2025, amid concerns over dilution from equity and convertible debt offerings.

The firm's market-implied net asset value (mNAV)-the multiple of enterprise value to Bitcoin's market value-has collapsed to near 1x, down from historical averages of 2.1x. This compression has weakened the "flywheel" effect that previously allowed MicroStrategy to issue shares at a premium to its Bitcoin per-share value, raising capital to buy more BTC. Recent policy changes permitting lower mNAV levels for new share issuance have drawn criticism from shareholders worried about further dilution.

Compounding these challenges, MicroStrategy's core business intelligence software operations face headwinds. Q1 2025 revenue fell 3.6% year-over-year to $111.1 million, with adjusted operating income turning negative at -$3.6 million. While subscription services revenue grew 62%, accounting for 33% of total revenue, the transition from traditional licensing to cloud-based models has temporarily hurt profitability. The company's $8.1 billion debt load, used to fund Bitcoin purchases, amplifies downside risk if crypto prices stagnate or decline.

Analysts warn that MicroStrategy's exclusion from the S&P 500 could further destabilize its stock. Despite CEO Michael Saylor's push for inclusion, the company's volatile valuation and heavy reliance on Bitcoin make it a risky bet for index benchmarks. A veteran analyst recently cautioned that MicroStrategy might again miss S&P 500 inclusion, citing its leveraged balance sheet and recent share price underperformance. Such a development could limit institutional ownership and exacerbate liquidity concerns.

Meanwhile, MicroStrategy's preferred securities strategy-designed to mitigate Bitcoin volatility while offering tax-deferred income-has yet to attract widespread adoption among wealth management firms and registered investment advisors. With the stock trading at a discount to its long-term average mNAV, some analysts view it as a potential entry point, though risks remain elevated according to recent analysis.

As Bitcoin struggles to reclaim its October high of $126,270, MicroStrategy's long-term bet on the cryptocurrency faces a critical test. While its recent purchases at an average price of $102,171 per BTC reflect conviction in Bitcoin's upside, the company's survival hinges on navigating market corrections and regaining investor confidence in its dual-track strategy of corporate treasury innovation and software growth.