MicroStrategy’s stock has plummeted nearly 40% from its record high of just over $540, leaving retail investors scrambling to recover their losses.

Disclaimer: The writer of this report holds shares in MicroStrategy (MSTR).

MicroStrategy (MSTR), a Bitcoin-centric software company, has been a market sensation in 2024, boasting a year-to-date surge of 416% and briefly climbing to a 600% gain last week.

The bullish run, however, came to an abrupt halt on November 21, following a damning short report from Citron Research. Since then, the stock has shed nearly 40% of its value, mirroring Bitcoin’s 10% retreat from $100,000 to $90,000.

Retail investors played a significant role in the lead-up to the crash. As reported by The Kobeissi Letter, retail traders poured a record-breaking $42 million into MicroStrategy shares on November 20—eight times October’s daily average. In just one week, retail inflows reached nearly $100 million.

This steep decline has caused MicroStrategy’s net asset value (NAV) premium to shrink dramatically. With a $75 billion market cap and 386,700 Bitcoin holdings worth $36 billion, the company’s NAV premium now stands at just 2.09, its lowest level in months.

Trading volume has also been astronomical. Last week, MicroStrategy recorded $136 billion in trading activity, a figure that surpasses even the peak of the GameStop (GME) frenzy in 2021.

“MicroStrategy’s trading volumes last week exceeded anything we saw during the height of GameStop mania,” said Eric Balchunas, Senior Bloomberg Analyst. “Even Amazon (AMZN) has never experienced a week like this.”