The stock price of MicroStrategy, a US-listed company heavily invested in Bitcoin, has more than doubled this year. As Bitcoin continues to surge and break historical highs, traders who bet on a decline in MicroStrategy’s stock price have suffered heavy losses.
According to Bloomberg, citing data from S3 Partners, the bearish traders who bet on a drop in MicroStrategy’s stock price have accumulated approximately $3.3 billion in losses since 2024. Looking at the past 12 months, the short sellers’ losses have exceeded $4.3 billion. If MicroStrategy’s stock price continues to rise, traders may be forced to buy back stocks to cut losses, leading to a short squeeze. This situation could further drive up the stock price and increase pressure on the bearish traders.
MicroStrategy has a relatively high proportion of tradable shares, exceeding 22%, which is often seen as a bearish signal. According to S3 Partners’ data, this characteristic is consistent with most stocks related to cryptocurrencies, including Coinbase Global and Marathon Digital Holdings. Ihor Dusaniwsky, Managing Director of Predictive Analytics at S3, stated that:
“This week, Wall Street analysts have raised their price targets for MicroStrategy, believing that the company’s Bitcoin purchase strategy is a catalyst for returns. For example, Canaccord Genuity increased its target price from $975 to the industry’s highest $1,810 this week, while TD Cowen’s analyst team also raised their target price from $1,220 to $1,560.”
