Why MicroStrategy Stock Just Plummeted 90%
Why MicroStrategy Stock Just Plummeted 90%
If you’ve taken a glance at MicroStrategy’s (MSTR) stock price recently, you might be thinking, “WTF just happened?” A sudden drop of 90% overnight is enough to make any investor’s heart skip a beat. But before you start panicking, let me reassure you that this was planned.
MicroStrategy did not suddenly lose 90% of its value overnight. Instead, the company executed a 10-for-1 stock split.
What is a 10-for-1 Stock Split?
A stock split is a corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares. In a 10-for-1 stock split, each share is split into ten. So, if you owned one share priced at $3,000, after the split, you now own ten shares priced at $300 each. The total value of your investment remains the same, but the number of shares you own has increased.
Why Do Companies Do Stock Splits?
Companies typically perform stock splits to make their shares more affordable and attractive to a broader range of investors. When a stock price becomes too high, it might deter small investors. By reducing the price per share, more people can buy the stock, potentially increasing the stock’s liquidity and market participation.
There you have it, now get back to work.
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why is microstrategy stock going down
