Bitcoin Soars, Strategy’s Valuation Diverges

As Bitcoin prices soar back to the $100,000 mark and MSTR’s stock continues to climb, the market is increasingly divided over the valuation of Strategy (formerly MicroStrategy). On one hand, several global institutional investors are quietly increasing their stakes in MSTR, viewing it as a crucial financial instrument for indirect Bitcoin exposure. On the other hand, its highly volatile and deeply leveraged asset structure has attracted the attention of Wall Street short-sellers.

Stock Outperforms Tech Giants, Attracts Wall Street Shorts

At the recent New York Sohn Investment Conference, legendary Wall Street short-seller and former hedge fund manager Jim Chanos revealed that he is shorting Strategy while simultaneously buying Bitcoin. He described this as an arbitrage opportunity, “buying at $1 and selling at $2.50.” Chanos pointed out that Strategy holds over 500,000 Bitcoins with high leverage, and its current stock price is significantly overvalued compared to its actual holdings. He criticized a wave of companies imitating Strategy, selling the concept of Bitcoin exposure through corporate structures to retail investors to justify high valuations, calling this logic “absurd.”

Over the past year, MicroStrategy’s stock price has surged by over 220%, while Bitcoin has only risen by about 70%. Chanos sees this trade as a “barometer” for observing retail speculative behavior.

Chanos is a highly influential and well-known investor on Wall Street. As the founder of Kynikos Associates, a hedge fund specializing in short-selling strategies, he is renowned for his in-depth fundamental analysis and keen ability to identify financial fraud and business model flaws in companies. His classic short-selling cases include Enron, WorldCom, and Luckin Coffee. However, in recent years, he has suffered significant losses from shorting Tesla, leading to the closure or adjustment of some funds.

It is worth noting that this is not the first time Strategy has been targeted by prominent short-sellers. In December last year, Citron Research, a well-known short-selling firm, announced that it was shorting Strategy. Although Citron was bullish on Bitcoin overall, it believed that MSTR had severely deviated from Bitcoin’s fundamentals. This announcement caused a sharp drop in MSTR’s stock price, but the overall market sentiment remained optimistic due to Bitcoin’s rise. Additionally, MSTR’s inclusion in the NASDAQ-100 Index improved its market visibility and liquidity, ultimately rendering the short-selling attempt unsuccessful.

Strategy Executives Also Selling Shares

Despite external short-selling pressure, Strategy’s executives have also been selling shares recently. According to disclosures, Jarrod M. Patten, a director of the company for over 20 years, has sold approximately $5.2 million worth of stock since April and plans to sell another $300,000 this week.

Stock Outperforms Tech Giants Despite Shorts

Despite these challenges, MSTR’s stock performance has remained strong. According to MSTR-tracker data, Strategy’s total market capitalization has reached $109.82 billion, ranking 183rd globally. This year, MSTR has risen by about 37.1%, outperforming not only Bitcoin but also major tech giants like Microsoft, NVIDIA, Apple, and Amazon.

Q1 Losses and Institutional Support

MSTR-tracker data shows that as of May 16, Strategy holds 568,840 BTC, with a Bitcoin investment return rate of 15.65% year-to-date. Based on the latest estimates, the company’s Bitcoin earnings per share (EPS) for the quarter are expected to be $37.82.

However, in contrast to the impressive Bitcoin return rate, Strategy’s financial performance for the latest quarter has been under pressure due to Bitcoin’s price pullback in the latter part of Q1. The company’s recently announced Q1 2025 financial report revealed a 3.6% year-over-year decline in revenue to $111.1 million, missing market expectations, with a net loss of $4.23 billion (a loss of $16.49 per share), significantly exceeding market expectations.

To ease financial pressure and further expand its Bitcoin asset exposure, Strategy is accelerating its capital strategy. Earlier this month, the company announced a new $21 billion public market common stock issuance plan and has raised its BTC yield target from 15% to 25%, and its BTC dollar gain target from $10 billion to $15 billion. Subsequently, Strategy unveiled a new “42/42 Plan” to raise $84 billion over two years to purchase Bitcoin. Wall Street analysts have expressed support for this strategy, with Benchmark and TD Cowen analysts reaffirming their buy ratings for the company, citing the feasibility of its capital-raising strategy.

Strategy’s Stock as “Smart Leverage”

Unlike most company stocks that reflect the market sales performance of their products, Strategy’s stock is positioned as “smart leverage” for Bitcoin. This narrative was detailed by its founder, Michael Saylor, when the company was renamed Strategy. There is a significant gap of about 45% between traditional assets (such as the SPDR S&P 500 ETF and Invesco QQQ Trust, with volatility levels of 15-20) and Bitcoin (with volatility levels of 50-60). Strategy’s common stock aims for an even higher volatility level than Bitcoin itself, targeting 80-90, while maintaining what Saylor calls “smart leverage” through a combination of equity issuance and convertible bonds.

Institutional Investors Back Strategy

Despite short-selling pressure, many large institutional investors have bought into Strategy’s strategy, enhancing market confidence. Fintel data shows that as of now, 1,487 institutions hold Strategy stock, with a combined holding of 139 million shares, currently valued at approximately $55.175 billion.

Citadel Advisors

Citadel Advisors, one of the world’s largest hedge funds, held over 23.22 million shares of MSTR, valued at more than $6.69 billion, as of Q1 2025, making it one of Strategy’s largest shareholders.

Vanguard Group

As of Q1 2025, Vanguard Group, one of the world’s largest mutual fund management companies, held approximately 20.58 million shares of MSTR, valued at over $5.93 billion.

Susquehanna International Group

Susquehanna International Group, a well-known global hedge fund, held over 19.88 million shares of MSTR, valued at more than $5.73 billion, as of Q1 2025.

Jane Street

According to 13F filings, Jane Street, one of the world’s top hedge funds, held over 16 million shares of MSTR, valued at nearly $4.63 billion, as of Q1 2025.

Capital International

Capital International held nearly 14.68 million shares of MSTR, valued at about $4.23 billion, as of Q1 2025, according to its 13F filings.

BlackRock

As of Q1 2025, BlackRock, one of the world’s largest asset management giants, held approximately 14.42 million shares of MSTR, valued at over $4.15 billion.

CalPERS

CalPERS, the second-largest public pension fund in the United States with over $300 billion in assets under management, held 357,000 shares of MSTR, valued at approximately $102 million, as of Q1 2025.

Bitcoin Soars, Strategy’s Valuation Diverges

As Bitcoin prices soar back to the $100,000 mark and MSTR’s stock continues to climb, the market is increasingly divided over the valuation of Strategy (formerly MicroStrategy). On one hand, several global institutional investors are quietly increasing their stakes in MSTR, viewing it as a crucial financial instrument for indirect Bitcoin exposure. On the other hand, its highly volatile and deeply leveraged asset structure has attracted the attention of Wall Street short-sellers.

Stock Outperforms Tech Giants, Attracts Wall Street Shorts

At the recent New York Sohn Investment Conference, legendary Wall Street short-seller and former hedge fund manager Jim Chanos revealed that he is shorting Strategy while simultaneously buying Bitcoin. He described this as an arbitrage opportunity, “buying at $1 and selling at $2.50.” Chanos pointed out that Strategy holds over 500,000 Bitcoins with high leverage, and its current stock price is significantly overvalued compared to its actual holdings. He criticized a wave of companies imitating Strategy, selling the concept of Bitcoin exposure through corporate structures to retail investors to justify high valuations, calling this logic “absurd.”

Over the past year, MicroStrategy’s stock price has surged by over 220%, while Bitcoin has only risen by about 70%. Chanos sees this trade as a “barometer” for observing retail speculative behavior.

Chanos is a highly influential and well-known investor on Wall Street. As the founder of Kynikos Associates, a hedge fund specializing in short-selling strategies, he is renowned for his in-depth fundamental analysis and keen ability to identify financial fraud and business model flaws in companies. His classic short-selling cases include Enron, WorldCom, and Luckin Coffee. However, in recent years, he has suffered significant losses from shorting Tesla, leading to the closure or adjustment of some funds.

It is worth noting that this is not the first time Strategy has been targeted by prominent short-sellers. In December last year, Citron Research, a well-known short-selling firm, announced that it was shorting Strategy. Although Citron was bullish on Bitcoin overall, it believed that MSTR had severely deviated from Bitcoin’s fundamentals. This announcement caused a sharp drop in MSTR’s stock price, but the overall market sentiment remained optimistic due to Bitcoin’s rise. Additionally, MSTR’s inclusion in the NASDAQ-100 Index improved its market visibility and liquidity, ultimately rendering the short-selling attempt unsuccessful.

Strategy Executives Also Selling Shares

Despite external short-selling pressure, Strategy’s executives have also been selling shares recently. According to disclosures, Jarrod M. Patten, a director of the company for over 20 years, has sold approximately $5.2 million worth of stock since April and plans to sell another $300,000 this week.

Stock Outperforms Tech Giants Despite Shorts

Despite these challenges, MSTR’s stock performance has remained strong. According to MSTR-tracker data, Strategy’s total market capitalization has reached $109.82 billion, ranking 183rd globally. This year, MSTR has risen by about 37.1%, outperforming not only Bitcoin but also major tech giants like Microsoft, NVIDIA, Apple, and Amazon.

Q1 Losses and Institutional Support

MSTR-tracker data shows that as of May 16, Strategy holds 568,840 BTC, with a Bitcoin investment return rate of 15.65% year-to-date. Based on the latest estimates, the company’s Bitcoin earnings per share (EPS) for the quarter are expected to be $37.82.

However, in contrast to the impressive Bitcoin return rate, Strategy’s financial performance for the latest quarter has been under pressure due to Bitcoin’s price pullback in the latter part of Q1. The company’s recently announced Q1 2025 financial report revealed a 3.6% year-over-year decline in revenue to $111.1 million, missing market expectations, with a net loss of $4.23 billion (a loss of $16.49 per share), significantly exceeding market expectations.

To ease financial pressure and further expand its Bitcoin asset exposure, Strategy is accelerating its capital strategy. Earlier this month, the company announced a new $21 billion public market common stock issuance plan and has raised its BTC yield target from 15% to 25%, and its BTC dollar gain target from $10 billion to $15 billion. Subsequently, Strategy unveiled a new “42/42 Plan” to raise $84 billion over two years to purchase Bitcoin. Wall Street analysts have expressed support for this strategy, with Benchmark and TD Cowen analysts reaffirming their buy ratings for the company, citing the feasibility of its capital-raising strategy.

Strategy’s Stock as “Smart Leverage”

Unlike most company stocks that reflect the market sales performance of their products, Strategy’s stock is positioned as “smart leverage” for Bitcoin. This narrative was detailed by its founder, Michael Saylor, when the company was renamed Strategy. There is a significant gap of about 45% between traditional assets (such as the SPDR S&P 500 ETF and Invesco QQQ Trust, with volatility levels of 15-20) and Bitcoin (with volatility levels of 50-60). Strategy’s common stock aims for an even higher volatility level than Bitcoin itself, targeting 80-90, while maintaining what Saylor calls “smart leverage” through a combination of equity issuance and convertible bonds.

Institutional Investors Back Strategy

Despite short-selling pressure, many large institutional investors have bought into Strategy’s strategy, enhancing market confidence. Fintel data shows that as of now, 1,487 institutions hold Strategy stock, with a combined holding of 139 million shares, currently valued at approximately $55.175 billion.

Citadel Advisors

Citadel Advisors, one of the world’s largest hedge funds, held over 23.22 million shares of MSTR, valued at more than $6.69 billion, as of Q1 2025, making it one of Strategy’s largest shareholders.

Vanguard Group

As of Q1 2025, Vanguard Group, one of the world’s largest mutual fund management companies, held approximately 20.58 million shares of MSTR, valued at over $5.93 billion.

Susquehanna International Group

Susquehanna International Group, a well-known global hedge fund, held over 19.88 million shares of MSTR, valued at more than $5.73 billion, as of Q1 2025.

Jane Street

According to 13F filings, Jane Street, one of the world’s top hedge funds, held over 16 million shares of MSTR, valued at nearly $4.63 billion, as of Q1 2025.

Capital International

Capital International held nearly 14.68 million shares of MSTR, valued at about $4.23 billion, as of Q1 2025, according to its 13F filings.

BlackRock

As of Q1 2025, BlackRock, one of the world’s largest asset management giants, held approximately 14.42 million shares of MSTR, valued at over $4.15 billion.

CalPERS

CalPERS, the second-largest public pension fund in the United States with over $300 billion in assets under management, held 357,000 shares of MSTR, valued at approximately $102 million, as of Q1 2025.