MicroStrategy (NASDAQ:MSTR) finds itself in the crosshairs of investment firm Kerrisdale Capital, as the latter takes a bearish stance on the software company's stock. Kerrisdale's decision to short-sell NASDAQ:MSTR stems from concerns over the inflated valuation driven by its heavy investment in Bitcoin. As MicroStrategy's shares plummet by 11% in response, investors are left to ponder the implications of Kerrisdale's bold move.
Kerrisdale's Short Position: On March 28, 2024, Kerrisdale Capital publicly announced its short position on MicroStrategy (NASDAQ:MSTR), citing an unjustifiable premium in NASDAQ:MSTR shares compared to the spot price of Bitcoin. The firm argues that MicroStrategy's valuation, heavily influenced by its Bitcoin holdings, has soared to unsustainable levels, with the implied Bitcoin price in NASDAQ:MSTR shares surpassing $177,000.
Risky Business: While MicroStrategy's strategic pivot towards Bitcoin initially garnered attention as a unique way to gain exposure to the cryptocurrency, Kerrisdale Capital believes that the current premium attached to NASDAQ:MSTR shares is unwarranted. With Bitcoin readily accessible through various channels, including brokerages and crypto exchanges, the rationale for paying a hefty premium for the same asset diminishes.
Market Dynamics: Kerrisdale's short position on MicroStrategy (NASDAQ:MSTR) reflects a broader sentiment in the crypto stock market, where total short interest amounts to $10.7 billion. MicroStrategy (NASDAQ:MSTR) and Coinbase (NASDAQ:COIN) lead the pack, commanding 84% of the bearish bets. Despite MicroStrategy's recent surge, fueled by a 155% increase year-to-date, short sellers remain undeterred, anticipating potential market corrections.
Challenges Ahead: MicroStrategy's bullish run has posed challenges for short sellers, with the company's outlook threatening significant paper losses for those betting against it. However, Kerrisdale's decision to short NASDAQ:MSTR underscores lingering doubts about the sustainability of its Bitcoin-centric strategy and the premium embedded in its shares.
They would be stupid to hold their shorts 100K+++++++ bitcoin incoming
ArtWells
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Would you please explain how you are calculating your Pivot Point and Support Point from using the 1 month high and low range? Thank you for your help.
jomamaa
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Kerrisdale capital has 600m AUM, and probably already closed shorts. it’s dump and pump game here.