Bit Brother (BETS) stock short sellers have prevailed as the company faces delisting from the Nasdaq exchange. The stock has already plunged by more than 74% this year, making it one of the worst performers in Wall Street. And it gets worse since the shares are down by over 99.85% in the past 12 months.

The biggest winners in this BETS stock implosion are the short-sellers, who have always maintained that this company was a mirage. Data by MarketWatch shows that BETS is the second most-shorted company in Wall Street after Imperial Petroleum. The company has a short interest of 72.11%, meaning that most people believe that the worst is yet to come. 

This situation accelerated earlier this month when the company received a delisting notice by Nasdaq. In addition to having an extremely low market cap, Nasdaq is concerned about the company’s market manipulation.

For example, in a recent SEC filing, the company filed for a $500 million mixed shelf, a ridiculous figure for a firm with a $1.2 million market cap. In December, the company said that it would raise $12 million through stocks and warrants. This happened a few months after it priced a $5.04 million registered direct offering.

As I have warned before, Bit Brother’s fundamentals are relatively weak. For starters, this is a company that was previously known as Urban Tea before it pivoted to Bitcoin mining and changed its name. This change happened in 2021 as cryptocurrencies were surging. As a result, the transition was part of a strategy to take advantage of the rally.

Bit Brother’s success as a Bitcoin miner has been a bit unlimited as the most recent results showed that its annual revenue came in at $2.9 million and its loss stood at over $92 million. If it continues as a going concern, there are chances that it will struggle to become profitable as the Bitcoin halving event nears.

BETS chart by TradingView

Looking ahead, I suspect that the shares will remain under pressure in the coming weeks as risks of delisting remain. This means that the shares will move below $1 in the near term as its fundamentals wane.

The only risk for Bit Brother short sellers is that the company’s high-short interest means that it can still go through a short squeeze. A short squeeze is a situation where a highly-shorted stock goes parabolic as we saw with AMC and Bed Bath & Beyond a few months. 

Therefore, initiating a short position at this level is a bit risk because of this. Besides, at its peak, BETS was one of the most popular stocks in social media platforms like StockTwits and Reddit.

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