Despite a notable short interest, MicroStrategy, led by Michael Saylor, continues to witness significant attention from investors, holding $6.9 billion in major short positions as reported by institutions.
As per data from investment research firm Fintel, as of June 6, MicroStrategy features prominently with 18 short positions on Fintel’s “The Big Shorts” list, a compilation of substantial short positions disclosed to the U.S. Securities and Exchange Commission.
The largest of these short positions against MicroStrategy stands at about $2.4 billion, ranking as the 27th-largest net short position among institutions.
This figure is notably less than Amazon’s highest net short position of $3.59 billion, while the largest net short position in the U.S. targets the SPDR S&P 500 Trust ETF, valued at a staggering $114.06 billion.
Despite this backdrop of aggressive short-selling, the sentiment among short-sellers seems to be changing.
The short-interest ratio for MicroStrategy’s stock has halved over the past six months, plummeting from 3.1 days to 1.5 days, indicating a decrease in short-seller interest and reduced risk of a short squeeze.
This ratio measures the average number of days required for short sellers to cover their positions, with a lower figure suggesting waning interest.
Amid these dynamics, MicroStrategy’s stock performance has been robust.
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According to Google Finance, since December 2023, the stock price has surged from $570 to $1,656, effectively tripling in value.
This rally coincides with developments in the cryptocurrency sector, where the launch of spot Bitcoin ETFs in 2024 led investment firm Kerrisdale Capital to speculate on the decreasing necessity of trading MicroStrategy shares as a proxy for Bitcoin exposure.
Kerrisdale Capital highlighted this shift in a March 28 analyst note, stating, “The days when MicroStrategy shares represented a rare, unique way to gain access to Bitcoin are long over.”
This sentiment reflects a broader market adjustment to new financial products that offer direct exposure to Bitcoin, potentially diminishing MicroStrategy’s appeal as an indirect investment option.
Adding to the narrative of success, a recent report by Cointelegraph highlighted that MicroStrategy has substantially outperformed Bitcoin itself over the past year.
The stock has risen by approximately 469%, compared to a 168% increase in Bitcoin’s value, underscoring a period of significant financial growth for the firm amidst a challenging and evolving investment landscape.
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