Multiple institutions are maintaining their bets on a drop in the stock price of MicroStrategy, a software intelligence company owned by Michael Saylor, with significant short positions totaling $6.9 billion.
Despite this, the number of short-sellers has nearly tripled in the past six months. As of June 6, MicroStrategy has 18 short positions listed on Fintel’s “The Big Shorts” list, showcasing the largest disclosed short positions by institutions to the SEC.
The largest position, amounting to around $2.4 billion, ranks as the 27th largest net short position among institutions, falling just short of Amazon’s highest net short position of $3.59 billion. The top net short position in the U.S. belongs to the SPDR S&P 500 Trust ETF, standing at $114.06 billion.
In October 2022, MicroStrategy’s stock price “days to cover” hit a peak of 5.80 days, indicating a potential short squeeze. Despite some institutions banking on MicroStrategy’s downfall, there has been a significant decrease in short-seller confidence, with the short-interest ratio decreasing by almost 50% over the last six months, dropping from 3.1 days to 1.5 days.
This indicator assists traders in assessing the risk of a short squeeze by revealing the average number of days short sellers need to close their positions. A lower number of days indicates less interest from short-sellers.
According to Google Finance data, MicroStrategy’s stock has surged since December 2023, starting at $570 and currently sitting at $1,656, tripling in value.
Over the past 30 days, MicroStrategy’s stock price has risen by 30.57%. This positive trend comes shortly after Kerrisdale Capital, a firm critical of cryptocurrencies, applied pressure on MicroStrategy shares following the launch of spot Bitcoin ETFs in 2024.
Kerrisdale Capital argued that with the approval of multiple spot Bitcoin ETFs, there may no longer be a compelling reason for investors to trade MicroStrategy stocks to gain exposure to Bitcoin.
In recent news, it was reported that MicroStrategy has significantly outperformed Bitcoin over the last year, with the stock increasing by approximately 469%, while Bitcoin has risen by 168%.
It’s important to note that this article does not offer investment advice or recommendations. All investment and trading decisions involve risks, and readers should conduct their own research before making any decisions.