Tom Lee Says MSTR Bears May Have Overplayed It—Short Squeeze Incoming?

MicroStrategy (MSTR) became the world’s most-shorted stock after recording ~$7 billion in unrealized Bitcoin (BTC) losses.

Tom Lee argues the crowded short position could push prices higher.

Why it matters:

• MSTR holders face compounding pressure as institutions exit en masse while short sellers pile in.
• Tom Lee of Fundstrat warns that when a short trade turns “consensus,” bad news gets priced in — making upside squeezes more likely.
• Institutions reducing MSTR exposure signal eroding confidence in the corporate BTC treasury model.

The details:

• Strategy (MicroStrategy), led by Michael Saylor, holds the No. 1 short interest position globally as of February 2026.
• Per CoinGecko data, the company has unrealized losses of over $7 billion tied to its corporate BTC treasury holdings.
• Angeles Wealth Management and Wealth Watch Advisors fully exited their MSTR positions.
• Caitlin John LLC cut its MSTR exposure by 96%, while Kovitz Investment Group and Atomi Financial Group also reduced holdings.
• Tom Lee stated via X (@fundstrat) that crowded shorts often result in price resilience despite negative fundamentals.

The big picture: