Multiple institutions are still banking on a drop in the stock price of MicroStrategy, the software intelligence company founded by Michael Saylor, with a significant $6.9 billion in major short positions. However, the short-seller has nearly tripled in just six months.
As of June 6, MicroStrategy has 18 short positions featured on the renowned investment research firm Fintel’s “The Big Shorts” list. This list showcases the largest short positions disclosed by institutions to the United States Securities and Exchange Commission. The largest position, valued at around $2.4 billion, ranks as the 27th-largest net short position among institutions. This amount falls just over a billion dollars short of Amazon’s highest net short position of $3.59 billion. The largest net short position in the U.S. is held by the SPDR S&P 500 Trust exchange-traded fund (ETF) at $114.06 billion.
In October 2022, MicroStrategy’s stock price “days to cover” metric reached as high as 5.80 days. Despite some institutions betting against MicroStrategy, there has been a noticeable decline in short-seller confidence. The short-interest ratio for MicroStrategy’s stock has dropped by almost 50% over the past six months, decreasing from 3.1 days to 1.5 days. This key indicator helps traders assess the risk of a short squeeze by showing the average number of days short sellers require to close their positions. A lower number of days indicates less interest from short-sellers.
According to Google Finance data, MicroStrategy’s stock has experienced a significant rally since December 2023, starting at $570 and soaring to $1,656, tripling in value. The stock price has increased by 30.57% over the last 30 days.
This surge comes shortly after the investment firm Kerrisdale Capital, known for its skepticism towards cryptocurrencies, exerted pressure on MicroStrategy shares following the launch of spot Bitcoin (BTC) exchange-traded funds (ETF) in 2024. Kerrisdale Capital argued that with the approval of several spot Bitcoin ETFs this year, there may no longer be a compelling reason for investors to trade MicroStrategy stocks to gain exposure to Bitcoin.
In a recent analyst note on March 28, Kerrisdale Capital stated, “The days when MicroStrategy shares represented a rare, unique way to gain access to Bitcoin are long over.” Additionally, Cointelegraph reported that MicroStrategy has significantly outperformed Bitcoin over the past twelve months, with the stock rising approximately 469% compared to Bitcoin’s 168% increase.
It is important to note that this article does not provide investment advice or recommendations. All investment and trading decisions involve risks, and readers should conduct their own research before making any financial decisions.