DraftKings Stock Blasted by Short Seller Note

MicroStrategy plans to sell stock to buy more Bitcoin

Managing Editor
Jun 15, 2021 at 2:50 PM
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Stocks are extending their pullback this week, as the Fed meeting looms over Wall Street. Among the names making notable moves today are sports betting stock DraftKings Inc (NASDAQ:DKNG), specialty retailer Petco Health and Wellness Company Inc (NASDAQ:WOOF), and crypto stock MicroStrategy Incorporated (NASDAQ:MSTR). Here's a quick look at what's moving the shares of DKNG, WOOF, and MST.   

DraftKings Hit With Scathing Hindenburg Note

Hindenburg Research dropped a bombshell this morning, disclosing a short position on DKNG. In their article, the notorious short seller demonstrated extensive research that DraftKings "systematically skirted the law and taken elaborate steps to obfuscate its black market operations." In response, DraftKings stock is down 5.1% to trade at $48.03, and earlier traded as low as $44.65.

Since a March 22 record peak of $74.38, the Special Purpose Acquisition Company (SPAC) darling of 2020 has shed 20.7% this quarter alone now. Nevertheless, keep an eye on how retail traders respond to the Hindenburg report, with a healthy 10.9% of DKNG's total available float sold short.

Petco Stock Riding the Reddit Rollercoaster

The pet retailer with the delightful ticker was last seen down 10% to trade at $25.75. This comes after a 17.9% pop yesterday thanks to a flurry of interest from Reddit forum WallStreetBets. WOOF is up 15.7% in 2021 even after today's breather. 

With the stock on the short-sale restricted list today (SSR), options trading has exploded. With under two hours left in today's trading, over 105,000 contracts have changed hands, 10 times the expected intraday amount and and volume pacing for the 100th percentile of its annual range. Leading the charge is the June 30 call, where new positions are being opened.

MicroStrategy Doubles Down on Bitcoin

The shares of MicroStrategy are up 5.3% to trade at $629.33 at last check, after the software company filed last night to sell up to $1 billion in stock to buy more Bitcoin (BTC). The volatile cryptocurrency was last seen up 3.5% at $41,217. Despite today's uptrend, MSTR is running headfirst into its 80-day moving average, a trendline that hasn't been conquered on a closing basis since mid-April.

A short squeeze could help the stock push past this resistance. Short interest is up 12% in the two most recent reporting periods, and the 1.78 million shares sold short accounts for 23.4% of MSTR's total available float.

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