$180M in March Trade Failures Could Signal a Short Squeeze for Strategy Stock

$180M in Failed Trades Could Set the Stage for MSTR Short Squeeze, Experts Warn

A surge of $180 million in failed trades during March has some analysts predicting a potential short squeeze for MicroStrategy (MSTR), the prominent bitcoin-investing tech company. The failed trades, along with the company’s heavy short interest, are generating buzz on Wall Street.

According to recent SEC filings and Fintel data, 609,000 MSTR shares failed to settle in March, a sign that short sellers are struggling to cover their positions. These failures to deliver (FTDs) occur when sellers can’t provide the shares they sold within the required timeframe. While FTDs can sometimes be technical issues, in this case, they are raising questions about the growing strain in MSTR’s short position.

MSTR saw a notable rise of 13% in March, despite these FTDs, which spiked significantly on March 26, with nearly 186,000 shares failing to settle, valued at $64 million. Additional spikes were seen on March 17 and March 21, further fueling the speculation that MSTR is on the edge of a short squeeze.

The stock remains under significant short interest, with approximately 29 million shares—or 12% of the company’s float—currently sold short. Trading data also shows that nearly a third of all MSTR trades are taking place in dark pools, private trading venues that aren’t fully transparent, increasing the likelihood of hidden short-selling pressure.

Despite these issues, MSTR’s price has surged, rising 35% since March 1 and gaining another 8% on April 22. The combination of high short interest and the mounting number of failed trades has some experts predicting that short sellers may soon be forced to buy back shares at higher prices, potentially accelerating the rally.

While failed trades alone don’t guarantee a short squeeze, the pattern of escalating FTDs and rising stock prices suggests that the pressure is mounting for MSTR—and a dramatic move could be on the horizon.