Renowned short selling institution Citron Research announced on social media platform X on Thursday (November 21) that the company has decided to short the "Bitcoin giant" Microstrategy and believes that the company has transformed itself into a Bitcoin investment fund.
Micro Strategy is the publicly traded company with the largest holdings of Bitcoin worldwide. With the outcome of the US election, President elect Donald Trump's friendly policies towards cryptocurrency have driven up the price of Bitcoin, and the stock price of Micro Strategy Company should have risen along with it. However, its stock price closed down more than 16% on Thursday, and even plunged 31% from the intraday high line at one point.
By comparison, Bitcoin rose 4.32% on that day, with a intraday high approaching $100000 at one point.
Micro strategy company 'overheated'
The decline in the stock price of micro strategy companies is mainly due to a post by well-known short selling firm Citron Research on social media platform X.
Citroen pointed out that "Bitcoin investment is now easier than ever before, and from the trading volume of micro strategy companies, it has completely deviated from the fundamentals of Bitcoin." However, while shorting micro strategy companies, Citroen still maintains a bullish view on Bitcoin.
I have great respect for Michael Saylor, the founder of Micro Strategy, but even he must know that this company is overheated
Citrus is not the first company to suggest hedging bullish Bitcoin positions through short selling micro strategies. In March of this year, another well-known institution, Kerrisdale Capital Management, pointed out that while it is long on Bitcoin, it is short on micro strategy stocks, and pointed out that micro strategy stocks are alternative investments to Bitcoin, and their stock prices have shown unreasonable premiums compared to the value driving Bitcoin.
It is reported that the stock price of Micro Strategy Company has surged by over 600% so far this year (as of Wednesday), while Bitcoin's increase during the same period is only slightly over 120%.
Under the leadership of founder and executive chairman Selle, Micro Strategy Company has been raising funds throughout the year to acquire more Bitcoin. The last time the company increased its holdings was on Wednesday of this week. The company plans to issue a total of $2.6 billion worth of convertible bonds and use the proceeds to continue increasing its holdings in Bitcoin.
According to the latest statistics from BitcoinImprovements, with the continued issuance of convertible bonds and increased holdings of Bitcoin this year, Micro Strategy's Bitcoin holdings have reached 331200, with a value of 32.464 billion US dollars.
It is worth mentioning that Micro Strategy became the most traded stock in the US stock market on Tuesday, November 20th, surpassing Nvidia and Tesla. ETF analyst Eric Balchunas stated on the same day that it has been many years since a single stock's trading volume exceeded that of these two stocks.