Big short sellers have placed significant bets against Michael Saylor’s business intelligence and software firm, MicroStrategy, selling stocks worth around $6.9 billion. Despite these substantial short positions, MicroStrategy stocks (MSTR) have continued to rise, exceeding investor expectations.

MicroStrategy Short Sellers Lose Confidence

Short sellers of MicroStrategy are losing confidence as MSTR stock prices have surged over the past six months. The firm currently holds $6.9 billion in short positions, making up 23.14% of its nearly $30 billion market capitalization.

Short selling is a strategy where investors bet on a stock's decline by borrowing and selling shares, hoping to buy them back at a lower price for a profit. However, MicroStrategy’s stock has not seen a significant drop this year. In fact, MSTR stocks have risen by about 190.08% in the past six months.

Many institutions still anticipate a decline in MSTR’s price to profit from their short positions. The large capital involved in shorting MicroStrategy poses a risk to investors if the stock price doesn’t fall.

Moreover, the tripling of MSTR stock value from $570 in December to $1,656 has made current short positions extremely costly. If the stock continues to gain, short sellers might be forced to exit their trades early to avoid larger losses.

Fintel, a financial data provider, has listed the largest short positions disclosed to the U.S. Securities and Exchange Commission (SEC), revealing that MicroStrategy’s biggest net short position is approximately $2.4 billion.

MicroStrategy's large short position is the 27th largest among institutions, with the SPDR S&P 500 ETF Trust holding the top spot at over $114 billion in net shorts.

MicroStrategy Stock Price Update

Michael Saylor, MicroStrategy’s founder and former CEO, has made significant bets on Bitcoin over the years. In January 2024, Saylor announced selling shares to buy more Bitcoin. As of May 1, 2024, MicroStrategy owned 214,400 BTC, valued at $15.2 billion, making it the largest Bitcoin holder among public companies.

Over the past year, MSTR stocks have increased by more than 469.66%, reaching $1,656.63 as of now. Google Finance data shows the stock value is still rising, up by 3.67% in the last five days and 31.75% over the past month.