Strategy Stock: A Perfect Storm for Short Sellers?

Strategy's stock rallies as Bitcoin's rebound triggers a leveraged play and squeezes short sellers, amplified by news from its 2026 conference.

This week’s sharp rebound in Bitcoin unleashed two powerful market forces simultaneously: a wave of buying from crypto optimists and intense pressure on short sellers. Concurrently, the ongoing "Strategy World 2026" conference in Las Vegas generated fresh headlines, injecting additional momentum into the share price. What is driving this significant movement?

A Leveraged Play on Bitcoin's Rebound

The primary catalyst was Bitcoin's abrupt recovery on Wednesday. The market views Strategy as one of the most leveraged proxy stocks for Bitcoin, owing to the company's massive holdings: 717,722 Bitcoin, acquired for a total of approximately $54.56 billion at an average price of $76,020 per coin.

Recent purchases underscore this strategic focus. On February 23, the company announced its 100th Bitcoin purchase, adding 592 Bitcoin for about $39.8 million at an average price of $67,286 per coin. According to the filing, this acquisition was fully financed through "at-the-market" sales of the company's stock.

Conference Newsflow Adds Fuel

The "Strategy World 2026" conference (February 23-26, Wynn Las Vegas) served as a platform for further announcements. A BusinessWire release dated February 25 highlighted new treasury users for STRC, including Prevalon Energy and Anchorage Digital. CEO Phong Le provided updates on the AI analytics platform "Strategy Mosaic." In his keynote, Michael Saylor framed Bitcoin as "Digital Capital," referencing a Bitcoin balance sheet value of roughly $45 billion as of February 24.

A new product also launched in Europe: 21Shares listed a "Strategy Yield ETP" on Euronext Amsterdam (ticker "STRC NA"). The product is designed to offer European investors regulated access to Strategy's preferred shares, which feature a variable, annualized dividend rate of 11.25%.

Notably, not all institutional investors are participating in the rally. The report indicates several major holders reduced or completely exited their positions, with one stake reportedly cut by 96%.

High Short Interest as an Accelerant

Compounding the upward pressure, Strategy is cited as the most heavily shorted large-cap stock in the United States. Data indicates between 11% and 14% of its free float is sold short—over 30 million shares. The "days to cover" metric stands at approximately 2.2, meaning it would take more than two full trading days for all short positions to be closed, even under normal trading volume.

When Bitcoin suddenly reverses upward, short sellers are quickly forced to act. This covering of positions can dramatically amplify the share price advance—a classic mechanism behind a potential short squeeze.

Context: A Recovery from Deep Losses

Despite the recent rally, the broader picture remains challenging. According to the data, the shares trade at €115.45, positioned clearly below key moving averages and approximately 54% below their level from twelve months ago. Furthermore, an RSI reading of 84.2 suggests the short-term momentum is deeply overbought.

Another critical point: the company's Bitcoin holdings reportedly show an unrealized loss of around $7 billion, as the average purchase price exceeds the current market value of Bitcoin referenced in the report.

The immediate calendar provides a focal point: the Strategy World conference concludes today, February 26. In the near term, the market's attention will likely center on whether the conference and product news translate into further tangible developments and if Bitcoin can sustain its recent recovery.