Bears Pile Into Strategy As Bitcoin Proxy Trade Wobbles

Coinbase Global Inc. and Charter Communications Inc. were among the other large-cap equities that were notably shorted.

• Strategy now has about 14% of its market cap sold short, the highest among U.S. large-cap stocks, per Goldman Sachs data.
• MSTR’s stock has dropped approximately 65% over the last six months, following fluctuations in cryptocurrency prices.
• Retail opinion on Stocktwits remained split, while analysts continue to predict an upside of more than 216% in the next 12 months as a possible target.

Strategy (MSTR) has become the most shorted U.S. large-cap stock, with roughly 14% of its market capitalization sold short as of late January, according to Goldman Sachs data cited by the Financial Times.

A year earlier, the company was not even among the top 50 most shorted names in that category. Other heavily shorted large-cap stocks included Charter Communications Inc. (CHTR) and Coinbase Global Inc. (COIN).

Bitcoin Exposure Is Driving Volatility 

Strategy remains the largest institutional holder of Bitcoin (BTC), with about 717,722 BTC on its balance sheet. The stock has fallen around 65% over the past six months, tracking the volatility in the crypto markets. 

On Wednesday, Strategy (MSTR) stock was up 20% during pre-market hours. On Stockwits, the retail sentiment around MSTR moved from ‘bearish’ to ‘neutral,’ as chatter levels around it remained ‘extremely low’ over the past day.

Retail commentary on Stocktwits remained mixed. One user questioned the company’s Bitcoin-focused approach even as the asset price has declined below the $65,000 mark. “The investment itself feels like a scam, designed to take your money while keeping the economy from stabilizing. They keep buying BTC with investors’ funds and abandon you until you exit at a loss,” the user wrote. 

Analysts Still See Massive Upside 

Despite the short interest ranking, analyst sentiment remains largely positive. 

Analysts see an upside of over 200%, with a 12-month price target of $394.38, compared to the current price of about $131. According to Koyfin, of the 14 analysts covering the stock, two gave the company a ‘Strong Buy’, one a ‘Hold’, and all the remaining analysts rated it a ‘Buy’.

MSTR stock has declined by more than 16% year to date. 

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