Author: Nancy, PANews
As Bitcoin prices return to the $100,000 high, and MSTR stock prices continue to rise, the market's divergence on the valuation of Strategy (formerly MicroStrategy) is accelerating. On one hand, several large global institutions are quietly increasing their holdings in MSTR, viewing it as an important financial tool for indirect Bitcoin allocation; on the other hand, its highly volatile and deeply leveraged asset structure is also attracting short-selling from Wall Street. As Strategy continues to increase its Bitcoin exposure, it is evolving into a barometer for Bitcoin price trends and the focal point of capital leverage games.
Stock price outperforms tech giants, targeted by Wall Street's big shorts
At the recent Sohn Investment Conference in New York, Wall Street legend short-seller and former hedge fund manager Jim Chanos stated that he is shorting Strategy while simultaneously buying Bitcoin, calling it an arbitrage opportunity of 'buy at $1, sell at $2.5.'
He pointed out that Strategy holds over 500,000 Bitcoins through high leverage, and the current stock price has a high premium compared to actual holdings. He criticized the emergence of a batch of companies imitating Strategy in the market, selling the concept of buying Bitcoin through corporate structures to retail investors to gain high valuations, calling this logic 'absurd.'
In the past year, MicroStrategy's stock price has risen over 220%, while Bitcoin has only increased by about 70%. Chanos believes this trade is a 'barometer' for observing retail speculation behavior.
Chanos is a highly influential and well-known investor on Wall Street, known for his deep fundamental analysis and keen ability to identify financial fraud and flaws in business models as the founder of the short-focused hedge fund Kynikos Associates. Classic short-selling cases include Enron, WorldCom, and Luckin Coffee. However, in recent years, he has also suffered severe losses from shorting Tesla, leading some funds to close or adjust strategies.
Notably, this is not the first time Strategy has become a target for well-known shorts. In December last year, the well-known short-selling institution Citron Research announced it was shorting Strategy and had previously issued a report shorting MSTR, although it maintained a bullish overall stance on Bitcoin, believing that MSTR had deviated significantly from Bitcoin fundamentals. This news once led to a sharp short-term drop in MSTR, but due to the rise in Bitcoin boosting market sentiment and MSTR's inclusion in the NASDAQ 100 index enhancing market visibility and liquidity, this short-selling ultimately failed.
Recently, in addition to external short-selling pressure, Strategy executives have also frequently reduced their shareholdings. It has been disclosed that Jarrod M. Patten, who has served as a company director for over 20 years, has cumulatively sold about $5.2 million in stock since April of this year and plans to continue reducing his holdings by $300,000 this week.
Despite this, MSTR's recent stock performance remains strong. According to MSTR-tracker data, Strategy's total market capitalization currently stands at $109.82 billion, ranking 183rd globally in asset market cap. This year, MSTR has accumulated a rise of approximately 37.1%, outpacing Bitcoin and leading tech giants like Microsoft, Nvidia, Apple, and Amazon.
Q1 financial report shows a huge loss of over $4 billion, backed by more than a thousand institutional shareholders
MSTR-tracker data shows that as of May 16, Strategy holds a total of 568,840 BTC, with a year-to-date return on Bitcoin investment of 15.65%. According to the latest data estimates, the expected Bitcoin earnings per share (EPS) for this quarter is $37.82.
However, in contrast to the impressive Bitcoin returns, Strategy's latest quarterly financial performance is under pressure due to the impact of Bitcoin price pullback in the later part of the first quarter of this year. The company's recently released Q1 2025 financial report showed a year-on-year revenue decline of 3.6% to $111.1 million, falling short of market expectations, with a net loss of up to $4.23 billion (loss per share of $16.49), significantly exceeding market expectations.
To alleviate financial pressure and further expand its Bitcoin asset exposure, Strategy is accelerating its capital operation strategy. Earlier this month, Strategy announced a new $21 billion public offering of common stock and has raised its BTC yield target from 15% to 25%, and BTC dollar revenue target from $10 billion to $15 billion. Subsequently, Strategy further announced the launch of a new '42/42 plan' aimed at raising $84 billion over two years to purchase Bitcoin. In response, Wall Street analysts expressed support, with Benchmark and TD Cowen analysts reiterating their buy rating for the company, believing its capital raising strategy is feasible.
Unlike most company stocks that correspond to the market sales performance of company products, Strategy stocks are positioned as Bitcoin's 'smart leverage.' Its founder Saylor elaborated on this narrative when the company was renamed to Strategy. There is an approximate 45% gap between traditional assets (like SPDR S&P 500 ETF and Invesco QQQ Trust, which have a volatility level between 15-20) and Bitcoin (with a volatility level between 50-60). The target volatility of Strategy's common stock is even higher than Bitcoin itself, aiming for a volatility level of 80-90, while maintaining what Saylor calls 'smart leverage' through a combination of equity issuance and convertible bonds.
Despite the short-selling attacks, many large institutional investors are still buying into Strategy's strategy, and the recent bets from institutional investors have also boosted market confidence. Fintel data shows that so far, a total of 1,487 institutions hold Strategy stock, with a total holding of 139 million shares, currently valued at approximately $55.175 billion.
Citadel Advisors
Citadel Advisors is one of the largest hedge funds in the world. 13F filings show that as of the first quarter of this year, Citadel Advisors held MSTR stock valued at over $6.69 billion, approximately 23.22 million shares, making it one of Strategy's largest shareholders.
Vanguard Group
As of Q1 2025, one of the world's largest public fund management companies, Vanguard Group, holds approximately 20.58 million shares of MSTR, valued at over $5.93 billion.
Susquehanna International Group
Susquehanna International Group is a globally renowned hedge fund company. As of Q1 2025, the company holds MSTR stock valued at over $5.73 billion, approximately 19.88 million shares.
Jane Street
13F filings show that as of Q1 2025, one of the top hedge funds globally, Jane Street, holds over 16 million shares of MSTR, valued at nearly $4.63 billion.
Capital International
According to the 13F filing submitted by Capital International in Q1 of this year, the institution holds nearly 14.68 million shares of MSTR, valued at approximately $4.23 billion.
BlackRock
As of the first quarter of this year, one of the largest asset management giants globally, BlackRock, holds approximately 14.42 million shares of MSTR, valued at over $4.15 billion.
CalPERS
CalPERS is the second-largest public pension fund in the United States, managing over $300 billion in assets. As of Q1 2025, CalPERS held 357,000 shares of MSTR, valued at approximately $102 million.
