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The shares of MicroStrategy, the biggest corporate Bitcoin bull, dropped by over 13% as Citi downgraded the recommendation to “sell.” The analysts cited a lack of confidence due to the MicroStrategy’s plan to increase Bitcoin exposure with the debt capital.

Simultaneously, Citi upgraded the fair value of MicroStrategy’s shares from $200 to $250 based on a BTC price of $19,200. MSTR closed on Tuesday at $289, down nearly 14% from $336 registered on Monday.

As previously reported, MicroStrategy said that it plans to sell convertible bonds worth $400,000 and use the proceeds to rise its exposure to the cryptocurrency market by buying Bitcoins. Notably, the firm has already bought over 40,000 BTC (about $775 million at the current exchange rate). However, the equity market analysts are skeptical about the new capital allocation strategy announced by Michael J. Saylor, CEO of the Virginia-based firm, in August 2020.

In a note to clients that was obtained by The Block, Citi said that the recent rally in MicroStrategy’s stock was “overextended” and described its strategy to raise $400 million via convertible notes to buy bitcoin as “aggressive” and possibly a “deal-breaker for software investors.”

MicroStrategy’s stock rally was overstretched, while its BTC buying strategy too aggressive and risky, Citi analysts said in the note to the customers, cited by the Block:

“After the close, MicroStrategy announced they plan to issue $400M in convertible notes to buy more bitcoin. While the magnitude of MSTR’s initial bitcoin investment (~$450M), was essentially unprecedented, at least this was done with excess cash and at a lower price (~$11K vs. ~$19K). The issuance of new debt to fund Bitcoin purchases is aggressive and maybe a deal-breaker for software investors, who may fear they now own a more risky asset management business.”

Also, the CEO was too fixated on cryptocurrency, potentially at the expense of the operational activity of the firm. The experts think MicroStrategy’s plan to increase it’s Bitcoin might negatively affect the company’s results and worsen the team’s psychological sphere.

Additionally, Citi pointed out that insiders had been selling the shares recently, meaning that they were not happy with Michael Saylor’s Bitcoin buying plan. Top management sold shares worth over $50 million. The President/CFO/COO Phong Lee sold nearly his whole position.

According to Bitcoin Treasuries, the cost of the cryptocurrency adopted by the company rose from $475 million to $732 million, representing over 193% return on investments.

Meanwhile, Bitcoin plunged below $18,000 for the first time since November 29. The cryptocurrency tested $17,639 during early Asian hours before recovering to $17,990. BTC has lost nearly 6% in the recent 24 hours and over 4% on a week-to-week basis. Despite the sell-off, Bitcoin’s long-term outlooks remain bullish.