Bitrabo Editorial
Investors betting against MicroStrategy by short selling stocks valued at $6.9 billion are facing challenges as the company’s stock prices continue to rise, surpassing expectations.
Confidence in Shorting MicroStrategy Declines
Short sellers targeting MicroStrategy are losing confidence due to the substantial increase in MSTR stock prices over the last six months, now holding $6.9 billion in short positions, representing 23.14% of the firm’s market capitalization.
Short selling involves speculating on a stock’s decline by borrowing and selling shares with the aim of buying them back at a lower price later to make a profit.
MicroStrategy’s stock prices have not shown a significant decline this year, having surged by 190.08% in the last six months.
Despite hopes for a stock price drop to yield profits, the high stakes involved in shorting MicroStrategy pose risks for investors should the stock price keep rising.
The significant increase in MSTR stock value from $570 to $1,656 has made short positions costly, prompting potential early exits by short sellers to avoid further losses.
Financial data provider Fintel has disclosed a list of large short positions, with MicroStrategy holding one of the largest net short positions at around $2.4 billion.
Institutions like SPDR S&P 500 ETF Trust currently hold the largest net short position at over $114 billion.
Update on MicroStrategy Stock Prices
Alongside short sellers, MicroStrategy’s founder Michael Saylor has been making substantial Bitcoin investments, with the company being a significant Bitcoin holder among public firms.
In January 2024, Saylor announced selling shares to acquire more Bitcoin, following previous Bitcoin purchases, making MicroStrategy a top Bitcoin holder with 214,400 BTC valued at $15.2 billion.
In the past year, MSTR stocks have surged by over 469.66%, reaching $1,656.63, with ongoing appreciation according to Google Finance data.
Over the last five days, MSTR has risen by 3.67% and 31.75% in the past month.