Wall Street’s Latest Horror Show: $180M in Failed Trades and the Short Squeeze Frenzy!

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What to know:

  • More than 609,000 MSTR shares with a notional value over $180 million failed to settle in March, according to SEC and Fintel data.
  • Daily failure to deliver data from Fintel shows multiple spikes in March, with over $63 million in failed trades on March 26 alone, highlighting persistent settlement issues tied to short activity.
  • That may be a sign a big move in either direction may be coming. Hold your breath!

Ah, the sweet, bitter melody of the stock market. Traders who decided to short Strategy (MSTR), the bitcoin buyer whose share price enjoyed a 13% rally in March, might want to consider a career change. It turns out they’re finding it a little too *difficult* to locate enough stock to return to the very lenders who believed their betting prowess would make the company’s value plummet.

Over $180 million worth of MSTR trades went belly up in March, as if the market was laughing at their attempts to fix things. Thanks to some sneaky SEC and Fintel data, we can now confirm that these so-called Failures to Deliver (FTDs) aren’t just administrative slip-ups; they may also reflect a hard-to-swallow truth: the short-sellers can’t find the stock they need to buy back. Who could’ve guessed? 🙄

FTDs are supposed to happen when a seller forgets to deliver shares on time — which, in today’s fast-paced, high-stakes trading world, sounds like an honest mistake. But let’s be real, it’s a telltale sign that those desperate short-sellers, who borrowed and sold stock, are now sweating bullets. And let’s not forget, a stock in such a predicament is often on the cusp of a big move. Big enough to shake things up like a freefalling airplane. 🎢

March was a particularly juicy month, with March 26 standing out like a sore thumb. That day, over 186,465 shares couldn’t be delivered — worth nearly $64 million. That’s a whole lot of missing stock, folks. Other juicy FTD days? March 17 and March 21, where the failed deliveries stacked up to tens of millions of dollars. In total, 609,000 shares failed to deliver that month. What a ride! 😱

Meanwhile, short interest in MSTR remains staggeringly high. As of April, a shocking 29 million shares have been sold short — more than 12% of all publicly available shares. That’s a lot of risk for those poor souls hanging onto their bets. And here’s the kicker: about one-third of MSTR trades on April 22 happened off-exchange in private venues like dark pools. So much for transparency, right? You’ve got to love the cloak-and-dagger games of Wall Street. 😈

Despite this mess, MSTR’s stock price has been on an upward tear. In fact, it’s up a staggering 35% since March and 44% since the lows of April. And just to keep things interesting, it jumped another 8% on Tuesday. So now, with short sellers stuck between a rock and a hard place, they might have no choice but to buy back shares to cover their losing positions. And if they can’t find more stock to borrow, well, they may just set the stage for one of those fabled short squeezes. If you’ve ever wondered what it’s like when a stock goes through the roof because the short-sellers panic, here’s your chance to find out. 📈🔥

Now, don’t get me wrong. FTDs aren’t necessarily a signal of price manipulation or a guarantee of a squeeze. But with their size and frequency in MSTR, it certainly seems like the perfect storm for a dramatic market move, one way or the other. Keep your eyes peeled, folks. This one’s going to get interesting. Or, if you prefer, you could just sit back and enjoy the show. 🍿

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2025-04-23 17:36