By
Steve Muchoki
July 1st, 2024
MicroStrategy has over 18 short positions as per the list on investment research firm Fintel’s “The Big Shorts”. Although there are strong short selling position, the overall interest in shorting MSTR is declining.
Michael Saylor’s software intelligence firm Microstrategy, also the largest corporate holder of Bitcoins, is facing major short positions to the tune of $7 billion on Wall Street. MicroStrategy Inc (NASDAQ: MSTR) stock price has already rallied by 3x in the past six months. While the short seller interest seems to be waning, however, several p[layers are still holding onto their short positions.
As of June 6, MicroStrategy has over 18 short positions as per the list on investment research firm Fintel’s “The Big Shorts”. This is the list of the largest short positions disclosed to the SEC by the institution.
The largest position, valued at around $2.4 billion, ranks as the 27th largest net short position among institutional investors. Comparatively, it falls just over a billion short of Amazon’s highest net short position, standing at $3.59 billion. Notably, the most significant net short position in the United States pertains to the SPDR S&P 500 Trust exchange-traded fund (ETF), with a staggering $114.06 billion.
As of Thursday’s closing, MicroStrategy (MSTR) stock was trading 2.25% down at a price of 1,656.63 with a market cap of 29.38 billion. In the last six months since December 2023, the MSTR stock price has rallied from $570 all the way past $1,656.
Short Seller Confidence on the Decline
Although certain institutions have wagered on a decline in MicroStrategy stock, there has been a notable decline in confidence among short sellers. Over the past six months, the short-interest ratio for MicroStrategy stock has decreased by nearly 50%, dropping from 3.1 days to 1.5 days.
This widely used indicator aids traders in assessing the risk of a short squeeze by indicating the average duration required for short sellers to close their positions. A lower number of days signifies diminished interest among short sellers.
Crypto skeptic investment firm Kerrisdale Capital has been putting pressure on the MicroStrategy share price following the launch of the spot Bitcoin ETFs earlier this year in January. The firm also noted that there’s little reason for investors to trade MSTR stocks in order to gain exposure to Bitcoin. “The days when MicroStrategy shares represented a rare, unique way to gain access to Bitcoin are long over,” explained Kerrisdale Capital in its March note.
In the last 12 months, the Microstrategy stock has massively outperformed Bitcoin. While the BTC price surged by 169% in the last year, the MSTR stock has also surged by a massive 469%.