MicroStrategy MSTR Stock Eyes Rebound After Finding Support, Backed by CalSTRS
MicroStrategy’s stock has been on a volatile ride, hit by Bitcoin swings and fresh funding policies, but its latest earnings and institution
Quick overview
- MicroStrategy's stock has faced volatility due to Bitcoin price corrections and changes in funding policies, recently dropping to its lowest level since April.
- Despite these challenges, the company reported a historic earnings surprise with a net income of $10.02 billion, driven by its substantial Bitcoin reserves.
- Executive Chairman Michael Saylor introduced a new financing tool, the Perpetual Stretch Preferred Stock, signaling a shift towards a Bitcoin-focused financial strategy.
- Institutional support is growing, highlighted by a $133 million investment from CalSTRS, as MicroStrategy continues to adapt its funding approach to facilitate further Bitcoin acquisitions.
MicroStrategy’s stock has been on a volatile ride, hit by Bitcoin swings and fresh funding policies, but its latest earnings and institutional backing hint at a renewed uptrend.
Stock Slide Amid Bitcoin Correction
After peaking above $540 last November, MicroStrategy (NASDAQ: MSTR) has struggled to maintain momentum. The stock has been under steady pressure since mid-July, dropping around 9% this week and hitting $326 on Wednesday, its lowest level since April. Two catalysts drove the decline: a new correction in Bitcoin prices and a controversial decision by management to relax equity issuance rules in order to continue accumulating Bitcoin.
MSTR Chart Weekly – The 50 SMA Held As Support Again
Despite these headwinds, the stock recently bounced from its 50-week simple moving average, where the stochastic indicator signaled oversold conditions. This technical backdrop suggests that a bullish reversal could be forming, allowing the broader uptrend to resume.
Historic Earnings Surprise
MicroStrategy’s second-quarter 2025 earnings shocked the market. The company reported a net income of $10.02 billion and earnings per share of $32.60 — a staggering 46,000% upside surprise relative to Wall Street forecasts. Revenue of $114.5 million surpassed expectations, while GAAP operating income surged to $14 billion, representing a 7,100% year-over-year increase. The primary driver behind these results was the company’s massive Bitcoin reserves, which climbed to record highs during the quarter.
Bitcoin-Centric Strategy and New Financial Innovation
Building on this momentum, Executive Chairman Michael Saylor unveiled a new financing tool: the Perpetual Stretch Preferred Stock (STRC). He described it as the company’s “iPhone moment,” representing a structural shift in how MicroStrategy taps markets. Backed by Bitcoin holdings, the STRC instrument offers high-yield dividends for income-focused investors. Out of a $4.2 billion at-the-market program, $2.5 billion has already been raised, underscoring strong demand. This move signals MicroStrategy’s deeper pivot away from its traditional software roots toward becoming a Bitcoin-focused financial vehicle.
Institutional Support and Funding Flexibility
Institutional interest in MicroStrategy’s Bitcoin strategy continues to grow. The California State Teachers’ Retirement System (CalSTRS), the third-largest U.S. pension fund, recently invested $133 million in MSTR shares, marking a significant endorsement from a major institutional player. Meanwhile, Saylor loosened key funding rules, allowing the company to issue new shares even when its market-value-to-Bitcoin-holdings ratio (mNAV) falls below 2.5x.
This policy shift is aimed at enabling further Bitcoin purchases regardless of near-term price swings. On August 18, the company added another $51 million in Bitcoin, a smaller acquisition compared with past cycles, but one that reflects a disciplined continuation of its accumulation strategy. With more than 226,000 BTC valued above $13 billion, MicroStrategy remains the largest corporate Bitcoin holder, cementing its position as a high-beta proxy for the cryptocurrency’s performance.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save