According to the “Big Short” form from the investment research firm Fintel, as of June 6th, MicroStrategy had 18 short positions with a total value of up to $6.9 billion. The form was compiled based on information disclosed to the U.S. Securities and Exchange Commission (SEC) by institutions, revealing the institutions’ largest short positions. In the compiled form, the largest short position is approximately $2.4 billion, ranking 27th in the overall form.
While some investment institutions predict that MicroStrategy’s stock price will fall and invest accordingly, confidence in this prediction is actually declining. This can be seen from the significant decrease in the company’s “short interest ratio”.
The short interest ratio refers to the average duration of short positions held, and this indicator has dropped from 3.1 days to 1.5 days over the past six months. This shows that investors shorting the stock are holding for a shorter period of time, indicating that their expectations for further price declines are no longer as firm.
Although the list does not specifically disclose the names of the shorting institutions, some institutions have previously publicly stated their intention to short MicroStrategy. According to Zombit’s previous report, the shorting institution Kerrisdale Capital stated in March of this year that MicroStrategy’s stock was overvalued, and the company currently holds a short position in MicroStrategy, while also holding long positions in Bitcoin spot ETFs from BlackRock and Fidelity to hedge against upside risk.
Kerrisdale Capital’s logic is that with several Bitcoin spot ETFs approved this year, investors have almost no reason to gain Bitcoin exposure through trading MicroStrategy stock. Furthermore, during the rise of Bitcoin, the speed at which MicroStrategy’s stock price rises far exceeds that of Bitcoin, leading to a relative premium of MicroStrategy over Bitcoin. This has attracted many institutions to start operating this “MicroStrategy stock (MSTR) vs. Bitcoin price difference trading”.
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