The Defiance Daily Target 1.75X Long MSTR ETF (MSTX), a leveraged exchange-traded fund that tracks the performance of MicroStrategy stock with 1.75x daily leverage, plummeted in pre-market and after-hours trading on Tuesday, October 30th, following MicroStrategy's (MSTR) disappointing Q3 2024 earnings report.
MicroStrategy reported a quarterly loss of $1.56 per share, significantly wider than analyst consensus estimates of a $0.14 loss. The company's revenue of $116.1 million also missed expectations of $122.7 million, reflecting challenges in its core business. As a leveraged ETF, MSTX amplifies the movements of the underlying MSTR stock, leading to a sharp decline in response to MicroStrategy's earnings miss.
Investor concerns about MicroStrategy's earnings had already weighed on MSTX in pre-market trading, with the ETF experiencing a plunge of around 9.51% before the earnings release. The disappointing results further exacerbated the sell-off, with MSTX plunging by over 13% in after-hours trading.
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