Strategy Inc is now six weeks into a sustained short unwind — but the stock keeps falling anyway, which is the tension worth watching this week.
Short interest has dropped another 19% over the past week, bringing the float-short ratio to 11.0% from a late-June peak near 17.7%. That retreat is now well-established and consistent with the pattern flagged in last week's note. Bears have covered roughly 11 million shares since peak positioning. Yet the stock is down 3.7% on the week and 5.3% on Tuesday alone, closing at $92.52. Shorts are leaving, but sellers are not.
The borrow market reinforces how empty the squeeze thesis has become. Availability has jumped to 555% of short interest — a new high for the year, up sharply from 412% just one day earlier, and well above the 52-week floor of 132%. Cost to borrow is running near 0.49%, essentially flat and effectively zero in lending terms. There is no mechanical pressure forcing the remaining 29.6 million short shares to cover. The lending pool is deep, borrow is cheap, and the short exit looks orderly rather than panicked.
Options positioning is where the story gets more interesting. Call buyers have re-asserted themselves with unusual conviction — the put/call ratio has dropped to 0.79, more than two standard deviations below its 20-day average of 0.93, and near the 52-week low of 0.758. That is the most call-heavy posture of the past year. Options traders are betting on upside even as the stock slides and the ORTEX short score has eased to 47.3 — down from 52.3 a week ago and now below the neutral 50 line, suggesting the bearish short-positioning signal is fading. The divergence between that call-heavy options book and a stock making new recent lows is the live tension in the name.
The Street has spent the past few weeks trimming targets while keeping bullish ratings. B. Riley, Cantor Fitzgerald, and Barclays all cut price targets in early August — Barclays to $125, Cantor to $186 — while maintaining positive ratings. Benchmark made the most dramatic move, slashing its target to $435 from $570, though that gap relative to the current $92.52 price raises questions about the vintage and methodology of that estimate. The consensus mean target is $229, implying more than 100% upside from current levels, though that spread reflects genuine disagreement about how to value a company whose enterprise value of roughly $51.8 billion is almost entirely a function of bitcoin. The bull case rests on Strategy's structural advantage in accumulating BTC through capital markets. The bear case points to legacy software revenue that provides little buffer if crypto sentiment turns further.
Institutional holders have been adding. Capital Research added 1.17 million shares as of July 31, and BlackRock added 1.64 million in the same period. Those are meaningful increments for a stock with this much bitcoin beta. Michael Saylor's own stake has barely moved. The consistent seller in the insider data is Independent Director Jarrod Patten, who has sold small tranches in nearly every reporting week since June — totalling around $1 million over the period — but the significance scores are low and the amounts are trivial relative to the float.
Earnings history offers some structure. The August print produced a negligible one-day move of -0.8%, followed by a five-day drift of -2.9%. The prior quarter's result was similarly muted on day one before recovering 3.8% over five days. The next event is scheduled for October 30. Between now and then, the question the data poses is whether call buyers accumulating at these levels are right that the stock has bottomed near $92, or whether the continued price weakness despite the short exit signals something the options market is not yet pricing — deteriorating bitcoin sentiment or a re-rating of the equity premium Strategy carries over its underlying BTC holdings.
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