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The world's largest public holding of bitcoin is 51% shorted

MicroStrategy, the world's largest public company by holdings of bitcoin, is shorting a record 51% of its shares as investors skeptical of the company's Bitcoin strategy believe the recent rally in its shares won't last.

MicroStrategy's short position is a record 51% of shares outstanding, with a notional value of $1.35 billion, according to S3 Partners, a financial analytics firm. Short interest in the stock has soared by 1.2 million shares in the past 30 days alone to an all-time high of 4.73 million shares, S3 said.

9e63cbb3bc7b9d6b2865cffa31c77715As of June 28, MicroStrategy held about 129,699 bitcoins in MicroStrategy, which cost $3.98 billion to buy, or an average of about $30,664 each. Founder and CEO Michael Thaler, one of Bitcoin's biggest bulls, believes the cryptocurrency will one day reach $6 million a coin. He has repeatedly said he won't sell any bitcoin, even in the face of a prolonged bear market.

The tech company, whose shares are used as a vehicle to invest in Bitcoin, has lost more than three-quarters of its value from its February 2021 peak. Its shares haven't closed above their 200-day moving average since December, although the current price is up 73% from its late-June low.

Matthew Unterman, a director at S3, said short interest in MicroStrategy shares had increased by 680,000 shares in the past seven days, suggesting that "short sellers are clearly taking advantage of recent strength to sell".

MicroStrategy reports second-quarter results after the market closes on Tuesday. The stock fell 3.6% Monday to close at $275.74, snapping a three-session winning streak.

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