- MicroStrategy stock continues soaring higher.
- MSTR is being heavily shorted, leading to max pain for shorters.
- MicroStrategy steps up Bitcoin accumulation.
MicroStrategy’s stock has soared to a 24-year high, triggering disbelief among doubters who questioned the company’s massive Bitcoin bet. However, against this backdrop of skepticism, MicroStrategy has become the biggest public company holder of Bitcoin since beginning its buying spree in August 2020.
Despite MicroStrategy’s stock surging 168% over just the past three weeks, with Bitcoin hitting fresh highs, short sellers continue doubling down on their bets against the company. This has led to “max pain” for shorters as MicroStrategy’s staggering rally shows no signs of abating, triggering comparisons with the infamous GameStop short squeeze of 2021.
MSTR Takes Off
Chiming in on MicroStrategy’s explosive rally, X influencer Vijay Boyapati noted that short sellers continue piling in to bet against MicroStrategy, with the company’s percentage float of short interest hitting 21.5%. A short percentage float above 20% is considered extremely heavy shorted.
Boyapati opined that these short sellers are getting spanked as MicroStrategy’s share price continues to soar. The X influencer added “This could turn into GameStop on steroids.
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The GameStop saga of 2021 reminds us that people’s power mobilized en masse can punish short sellers, even if those short sellers are well-resourced Wall Street hedge funds.
Chartist “Coosh” Alemzadeh echoed similar sentiments to Boyapati, stating, “The MicroStrategy Short Squeeze will be a sight to behold.” He argued that the current price action is triggering FOMO, making the short squeeze a self-fulfilling prophecy.
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The current situation highlights how deeply intertwined MicroStrategy’s stock has become with Bitcoin, some would argue MSTR is now a proxy vehicle for BTC exposure.
MicroStrategy Steps Up Bitcoin Accumulation
MicroStrategy’s massive Bitcoin holdings have effectively made the company an unofficial proxy for the cryptocurrency itself. As Bitcoin’s price continues surging to new all-time highs, MSTR reflects those gains amplified through the company’s Bitcoin bet.
The company announced the purchase of an additional 12,000 BTC on Monday, funded by the issuance of $822 million in convertible senior notes. Convertible notes are short-term debt instruments that can later be converted into shares of the underlying company. The acquisition takes MicroStrategy’s holdings to a staggering 205,000 BTC, equivalent to $14.99 billion at the current price.
However, MicroStrategy shows no signs of slowing its Bitcoin accumulation. On Wednesday, the company proposed another $500 million convertible notes offering explicitly intended to raise capital for acquiring more Bitcoin.
On the Flipside
- Despite MSTR’s soaring price, it is still around 40% below its ATH of $3,130 achieved in March 2000.
- The GameStop movement rallied support from everyday individuals to “spank” Wall Street funds betting on the company’s demise. MicroStrategy is a solvent company.
- Even though the US BTC ETFs allow a “safer” way to invest in BTC than buying directly, many people cannot buy US ETFs, making MSTR an attractive alternative and likely a factor in its soaring stock price.
Why This Matters
Whether or not MicroStrategy ends up being the next GameStop, the saga underscores how publicly traded companies making contrarian bets can quickly become lightning rods for speculation. A short squeeze would vindicate MicroStrategy’s bold Bitcoin strategy and likely invite more regulatory scrutiny around its disclosures.
Learn more about MicroStrategy’s relentless accumulation of Bitcoin here:
MicroStrategy Bitcoin Bag Nears Key Milestone with $822M Buy
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