Metaplanet (TYO: 3350) is making news as it has become Japan’s most shorted stock. The stock has come on the radar of hedge funds following a massive 57% gain over the past week, and a 163% gain on the monthly chart. With the stock now trading at a yearly high of 933 JPY, short bets have shot up significantly. Many analysts are now comparing this to euphoric GME short squeeze of 2021.
With its aggressive Bitcoin purchases and stellar Q1 results, the Japanese firm’s stock price has seen mammoth trading volumes on the Tokyo Stock Exchange, as well as other global indexes. However, looking at the Japan equity data, it turns out that Metaplanet is the most shorted stock by hedge funds in the country. Speaking on this development, company CEO Simon Gerovich said:
“Apparently Metaplanet is the most shorted stock in Japan. Do they really think betting against Bitcoin is a winning strategy?”
The company’s Bitcoin Strategist, Dylan LeClair, showed how the stock has achieved record trading volumes on May 20. In Germany, the company’s DN3 shares witnessed a staggering 2.51 million shares traded, with a total transaction value of €15.35 million. Meanwhile, the over-the-counter (OTC) U.S. ticker $MTPLF recorded 21.14 million shares traded, amounting to $150.29 million in value.
Crypto industry experts believe that despite this massive rally, the Metaplanet stock is relatively cheap. Reiterating his previous stand, BlockStream CEO Adam Back explained:
“IMO @Metaplanet_JP is relatively cheap based on historic mNAV ranges, and on months to cover metric so shorting it seems like a really bad idea to me! this is the second 3350:TYO circuit-breaker limit-up day in a row, really bad timing to be short”.
For the second-straight trading session, the stock has hit a circuit on the Tokyo Stock Exchange today, within just 2 minutes of starting the day’s trading. Investor Brian Brookshire has hinted at another potential limit-up day for $MTPLF stock, predicting continued momentum in its rally.
“If $MTPLF is any indication, 3350 will hit limit-up again tomorrow as well. How many days in a row can it hit limit-up, I wonder… Short squeeze in slow-mo,” Brookshire noted in a recent statement. Bitcoin maverick Michael Saylor also praised the recent rally in the stock price.
Gamestop (GME) was one of the most shorted stock back in 2021 with large hedge funds betting against declining business. But, then the GME stock price rose by 3200% and liquidated the shorted hedge funds. It was a bull run popular executed by a popular subreddit, wallstreetbets.
Analysts are comparing this to the current situation of Metaplanet as it is heavily shorted by Japanese hedge funds. Metaplanet is not a very big stock and as such does not have enough liquidity required for exit in case of a short squeeze. Considering that Metaplanet is now heavily invested into Bitcoin it is highly co-related to BTC price.
Institutional interest is only rising in Bitcoin and as BTC price looks to break all time highs, these hedge funds are in a very risky spot.
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