MicroStrategy (MSTR) Sends Short Sellers Packing Amid 155% YTD Surge

Considering the significant growth that MicroStrategy (MSTR) has recorded in the last few months, the stock’s short sellers are now reeling in notable losses.

MicroStrategy Short Sellers Reeling in Losses

Business intelligence and software company MicroStrategy has seen huge growth this year even with its shares registering very high gains. According to a Bloomberg report, the current outlook of the market threatens traders’ bets against the company as they are looking at experiencing massive paper losses. 

Within the first three months of this year alone, these MicroStrategy short sellers positioning against the company have seen losses amounting to over $3.3 billion. This is closely linked to the fact that MSTR shares have recorded over 155% surge within the same period, per data from S3 Partners LLC.

According to Larry Tentarelli, the Chief Technical Strategist, Blue Chip Daily Trend Report, 

“Shorting MicroStrategy is a tough position to take.” 

The Rise and Fall of MSTR Shares

Towards the end of February, MSTR registered 10% gains for the second consecutive day closing at $962.95. In a few hours, an additional 2.85% price surge was recorded for the MSTR stock, moving the shares closer to $1000.

The MSTR price rally happened around the same time when Bitcoin (BTC) price was experiencing massive gains. At that time, the leading digital asset by market capitalization was trading at $64,000 with a total weekly gain of around 20%. Even at this rate, MSTR shares notably outperformed that of Bitcoin. 

In the first week of March, the MSTR shares plunged by more than 15% during a volatile trading session. The plunge happened right after MicroStrategy announced plans to buy more of Bitcoin using the money raised from the sale of $600 million in convertible senior notes. Tentarelli believes that this would have been the chance for short sellers to bag profits.

However, the MSTR shares were quick to recover, leaving the MicroStrategy short sellers at a loss. With Bitcoin price still surging, the MSTR stock is likely to also face further positive momentum, keeping its short sellers in more pain. 

Generally, it is obvious that MicroStrategy Bitcoin strategy is paying off. With its huge Bitcoin holding running into 203,000 BTC, MicroStrategy is fated to reap huge profit amidst the Bitcoin rally.