Economist and Bitcoin (CRYPTO: BTC) critic Peter Schiff expressed doubts about MicroStrategy Inc.'s (NASDAQ:MSTR) decision to split its stock amidst a bear market, labeling the move as an act of desperation
What Happened: Schiff took to X to share his views on the Virginia-based company announcing a 10-for-1 stock split Thursday. "I don't think I've ever seen a company announce a stock split when its shares were solidly in a bear market, down 35% from the high. This really smacks of desperation. MSTR looks very vulnerable for a major drop," he wrote.
I don't think I've ever seen a company announce a stock split when its shares were solidly in a bear market, down 35% from the high. This really smacks of desperation. MSTR looks very vulnerable for a major drop.
— Peter Schiff (@PeterSchiff) July 11, 2024
Like other companies, MicroStrategy took the decision with the intention of making its shares more accessible to investors and employees, potentially broadening its shareholder base.
For the curious, a stock split increases the number of shares by reducing the value of the stock while keeping the firm's market cap unchanged.
Why It Matters: This skepticism comes in the wake of Schiff's recent criticism of Bitcoin, which he referred to as a "fraud," in response to a supportive post by MicroStrategy co-founder Michael Saylor, a known advocate of the world's largest digital asset.
MicroStrategy, which calls itself the world's first Bitcoin development company, is an industry leader in incorporating the digital asset into its corporate reserve strategy. As of this writing, the software company holds a little over 1% of Bitcoin's total circulating supply, worth $12.9 billion, according to bitcointreasuries.net.
Price Action: At the time of writing, Bitcoin was exchanging hands at $57,277.50, down 0.98% in the last 24 hours, according to data from Benzinga Pro.
Shares of MicroStrategy closed 4.05% higher at $1.358.56 during Thursday's regular session. The stock has slumped 20% over the last month, likely due to Bitcoin's correction.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.