The T-Rex 2X Long MSTR Daily Target ETF (MSTU) surged 12.08% in pre-market trading on Friday, November 29, 2024, reflecting the volatility in its underlying MicroStrategy (MSTR) holdings.
MicroStrategy, the enterprise analytics software company, has captivated Wall Street's attention this year by becoming the first public company to effectively adopt Bitcoin investing as an operating model. Its stock has skyrocketed over 460% year-to-date and over 1800% in the past two years as it aggressively purchased Bitcoin using proceeds from issuing ultra-low-yield convertible notes – a strategy dubbed the "infinite money glitch" on social media.
However, concerns have been raised about the sustainability of MicroStrategy's leverage-driven Bitcoin investing strategy. A recent article warns that while MicroStrategy has defied skeptics so far, highly leveraged scenarios like this have always eventually ended in disaster on Wall Street. The article also contends that MicroStrategy stock is trading at an unjustifiable premium of over 120% to the value of its Bitcoin holdings based on current prices.
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