MSTR

Hedge

Tom Lee

Steve

Strategy (formerly MicroStrategy) has climbed to the top of Goldman Sachs' most-shorted large-cap stocks list, with 14% of its publicly available shares sold short as of late January 2025, according to&nbsp;<a href="https://www.ft.com/content/7f933b23-c4d5-449e-aa46-f9090da332df" rel="noopener noreferrer nofollow">Financial Times</a>. That is a dramatic reversal from a year ago, when the company did not even appear in the top 50. Yet Fundstrat's Tom Lee argues that this level of bearish consensus may actually signal a price floor rather than further downside.
<h2 id="span-span-strong-how-did-strategy-become-america-s-most-hated-stock-strong-span-span">How Did Strategy Become America's Most Hated Stock?</h2>
<a href="https://bsc.news/post/what-is-bitcoin-how-it-works-mining-digital-gold-guide" rel="noopener noreferrer nofollow">Bitcoin</a> peaked in October 2024. Strategy's stock began declining even before that. By November, it had jumped from outside the top 50 to third place on Goldman's most-shorted list. By January 2025, it had taken the top spot among companies with a market cap of at least $25 billion.
The core of the bearish case is simple math. Strategy holds 717,722 Bitcoin, acquired for a total of $54.56 billion at an average price of $76,020 per coin. With Bitcoin trading near $65,500, the company is sitting on roughly $7 billion in unrealized losses. The stock itself has fallen more than 63% over the last six months, a steeper decline than Bitcoin itself over the same period.
For context, Coinbase (COIN) came in fourth on Goldman's most-shorted list with 11% short interest, showing that bearish pressure extends across the broader crypto-adjacent equity space.
<h2 id="span-span-strong-what-is-short-selling-and-why-does-it-matter-here-strong-span-span">What Is Short Selling, and Why Does It Matter Here?</h2>
Short selling is when an investor borrows shares of a stock, sells them at the current price, and hopes to buy them back later at a lower price. The profit comes from the difference. If the stock rises instead of falling, losses can be unlimited, which is what makes crowded short positions risky for the short sellers themselves.
Strategy is a leveraged Bitcoin proxy inside a public equity structure. It issues stock, uses the proceeds to buy Bitcoin, and deliberately leans into volatility. When Bitcoin runs up, Strategy often rises harder. When Bitcoin falls, the structure amplifies losses in the same way.
Shorting Strategy is not just a bet on a single company. It is a macro bet on Bitcoin, and a skeptical view of whether a corporate treasury built entirely around one volatile asset can hold up over time.
<h2 id="span-span-strong-why-tom-lee-thinks-the-short-interest-is-actually-bullish-strong-span-span">Why Tom Lee Thinks the Short Interest Is Actually Bullish</h2>
Tom Lee, co-founder of Fundstrat Global Advisors and a well-known Bitcoin bull,&nbsp;<a href="https://x.com/fundstrat/status/2026426177108287570" rel="noopener noreferrer nofollow">posted</a> on X that Strategy becoming a "consensus short" is actually a signal worth paying attention to, but not in the way bears expect.
His argument: when a trade becomes crowded, bad news is already priced in. That means the stock can rise even when negative headlines hit, because there is nothing left to surprise the market on the downside.&nbsp;
<div>
 <blockquote class="twitter-tweet">
 More signs of a meaningful low in place 👇 When a stock becomes a “consensus” short, it is also a crowded trade - hence, a stock can rise on “bad news” - because the bad news 🗞️ is priced in <a href="https://t.co/svOgwV8JJ5" rel="noopener noreferrer nofollow">https://t.co/svOgwV8JJ5</a>— Thomas (Tom) Lee (not drummer) FSInsight.com (@fundstrat) <a href="https://twitter.com/fundstrat/status/2026426177108287570?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">February 24, 2026</a>
 </blockquote>
</div>
Any improvement in sentiment or price action can trigger a short squeeze, where short sellers rush to cover their positions by buying shares, pushing the price up further.
Lee described the situation as showing "more signs of a meaningful low in place."
<h2 id="span-span-strong-steve-eisman-and-the-broader-hedge-fund-picture-strong-span-span">Steve Eisman and the Broader Hedge Fund Picture</h2>
Not everyone shares Lee's optimism. Steve Eisman, the investor famous for shorting mortgage-backed securities ahead of the 2008 financial crisis and later portrayed in "The Big Short," has&nbsp;<a href="https://www.benzinga.com/crypto/cryptocurrency/26/02/50816367/michael-saylor-should-be-in-jail-and-bitcoin-is-for-boomers-says-ex-fidelity-star-who-also-has-a-contrarian-take-on-tesla" rel="noopener noreferrer nofollow">disclosed</a> a short position in Strategy. That is a notable signal given his track record of identifying overleveraged structures before they unravel.
Meanwhile, Goldman Sachs data shows hedge funds have been rotating broadly within the technology sector:
<ul>
 <li>Funds entered 2026 with record-long positions in semiconductors and the lowest weight in software stocks since 2019.</li>
 <li>Short interest across the S&amp;P 500 broadly has climbed to a median of 2.7%, near one of the highest levels of the past decade.</li>
 <li>Chipmakers like ASML and Applied Materials (AMAT) have joined Goldman's Hedge Fund VIP list, while Salesforce (CRM) and DocuSign (DOCU) have seen the largest declines in hedge fund ownership.</li>
</ul>
Strategy sits in a category of its own. It is not being shorted because hedge funds are rotating out of software. It is reportedly being shorted because it represents a concentrated, leveraged conviction trade on Bitcoin at a moment when Bitcoin itself is under pressure.
<h2 id="span-span-strong-what-wall-street-analysts-actually-think-about-mstr-strong-span-span">What Wall Street Analysts Actually Think About MSTR</h2>
Despite the short interest, Wall Street analysts covering Strategy are heavily bullish. According to&nbsp;<a href="https://sg.finance.yahoo.com/news/strategy-mstr-buy-wall-street-143006902.html" rel="noopener noreferrer nofollow">Zacks Equity Research</a>, the stock carries an average brokerage recommendation of 1.19 on a scale of 1 (Strong Buy) to 5 (Strong Sell). Of 16 firms covering the stock, 14 rate it a Strong Buy and one rates it a Buy, meaning roughly 94% of analysts lean positive.
Recent ratings include:
<ul>
 <li>Mizuho maintained an Outperform rating on February 17, cutting its price target from $403 to $320.</li>
 <li>Cantor Fitzgerald kept an Overweight rating while lowering its target from $213 to $192.</li>
 <li>The average analyst price target across recent ratings sits at $254, more than double MSTR's current trading price of around $124.61.</li>
</ul>
The gap between analyst targets and current price reflects how much uncertainty is baked into the stock right now.
<h2 id="span-span-strong-saylor-keeps-buying-despite-the-losses-strong-span-span">Saylor Keeps Buying, Despite the Losses</h2>
Michael Saylor has not changed course. Strategy recently completed its 100th Bitcoin purchase announcement, adding 592 BTC for $39.8 million last week. The company now holds 717,722 Bitcoin in total.
Saylor has also publicly stated that the current downturn feels milder than previous crypto winters, and that a recovery is coming. While that language sounds familiar to anyone who has been in crypto through previous cycles, the scale of Strategy's balance sheet exposure makes this cycle structurally different from past ones. The first major cash crunch for the company is not expected until 2027, which gives it some runway.
At the time of writing, MSTR shares&nbsp;<a href="https://finance.yahoo.com/quote/MSTR/" rel="noopener noreferrer nofollow">closed</a> 0.73% higher at $124.61 during Monday's regular session before slipping 0.17% in after-hours trading.
<h2 id="span-span-resources-span-span">Resources&nbsp;</h2>
<ol>
 <li><a href="https://www.ft.com/content/7f933b23-c4d5-449e-aa46-f9090da332df" rel="noopener noreferrer nofollow">Report by Financial Times</a>: Mirror mirror on the wall, what is the most shorted stock of them all?</li>
 <li><a href="https://finance.yahoo.com/news/america-most-shorted-stock-wall-020336775.html" rel="noopener noreferrer nofollow">Report by The Street</a>: America’s most shorted stock is Wall Street’s Bitcoin machine</li>
 <li><a href="https://www.benzinga.com/crypto/cryptocurrency/26/02/50816367/michael-saylor-should-be-in-jail-and-bitcoin-is-for-boomers-says-ex-fidelity-star-who-also-has-a-contrarian-take-on-tesla" rel="noopener noreferrer nofollow">Report by Benzinga</a>: 'Michael Saylor Should Be In Jail' And 'Bitcoin Is For Boomers' Says Ex-Fidelity Star, Who Also Has A Contrarian Take On Tesla</li>
 <li><a href="https://www.coindesk.com/markets/2026/02/23/strategy-logs-100th-bitcoin-purchase-announcement-adding-592-coins-last-week-for-usd39-8-million" rel="noopener noreferrer nofollow">Report by CoinDesk</a>: Strategy logs 100th bitcoin purchase announcement, adding 592 coins last week for $39.8 million</li>
 <li><a href="https://sg.finance.yahoo.com/news/strategy-mstr-buy-wall-street-143006902.html" rel="noopener noreferrer nofollow">Zacks Equity Research</a>: Is Strategy (MSTR) a Buy as Wall Street Analysts Look Optimistic?</li>
</ol>

Michael Saylor's Strategy Just Became America's Most Shorted Stock, Tom Lee Calls the Bottom

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