Strategy Stock Slumps Amid Bitcoin Decline and Rising Rate Expectations
Strategy Inc's stock price fell nearly 3.9% in morning trading today, settling at $137.30. The drop was attributed to a combination of factors, including persistent pressure on Bitcoin and rising interest rate expectations.
The cryptocurrency itself slipped below the psychologically important $80,000 level on Monday, closing around $79,116, down more than 1.5%. This decline weighed heavily on Strategy's shares, given that its equity is widely viewed as a leveraged proxy for Bitcoin's price.
The primary macro headwind came from last Friday's blowout US August employment report, which showed 162,000 new jobs created against expectations of roughly 55,000. This sent rate-hike probabilities higher and put pressure on risk assets across the board.
On the corporate side, Strategy announced that its board approved doubling its Digital Credit Securities Repurchase Program from $1 billion to $2 billion. However, this move only covered preferred shares and did not provide any direct cushion for ordinary shareholders.