Written by: Nancy, PANews
With Bitcoin prices returning to the $100,000 high and MSTR stock prices continuing 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 has also attracted Wall Street short sellers. As Strategy continues to increase its Bitcoin exposure, it is evolving into a bellwether for Bitcoin price trends and a focal point for capital leverage battles.
Stock price outperforms tech giants, attracting attention from Wall Street's biggest short sellers.
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 buying at $1 and selling at $2.5.'
He pointed out that Strategy holds over 500,000 Bitcoins through high leverage, and the current stock price shows a high premium compared to actual holdings. He criticized the emergence of a batch of companies imitating Strategy, selling the concept of purchasing Bitcoin through corporate structures to retail investors, seeking high valuations, calling this logic 'absurd.'
In the past year, MicroStrategy's stock price has increased by over 220%, while Bitcoin has only risen about 70%. Chanos believes this trade is a 'barometer' for observing retail speculative behavior.
Chanos is a highly influential investor on Wall Street, known for his deep fundamental analysis and sharp ability to identify financial fraud and business model flaws as the founder of the short-focused hedge fund Kynikos Associates. His classic short cases include Enron, WorldCom, and Luckin Coffee. However, in recent years, he has faced 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 become a target of well-known short sellers. In December last year, the prominent short-selling firm Citron Research announced it was shorting Strategy, despite its bullish stance on Bitcoin overall, arguing that MSTR had significantly diverged from the Bitcoin fundamentals. This news once led to a sharp decline in MSTR, but due to a bullish market sentiment driven by Bitcoin's rise and the visibility and liquidity boost from MSTR being included in the Nasdaq 100 index, this shorting attempt ultimately failed.
Recently, in addition to external short-selling pressure, Strategy executives have also frequently sold off shares. According to disclosures, Jarrod M. Patten, who has served on the company's board for over 20 years, has cumulatively sold about $5.2 million worth of stock since April of this year and plans to continue selling $300,000 worth this week.
Nevertheless, MSTR's recent stock performance remains strong. According to MSTR-tracker data, Strategy's total market capitalization has reached $109.82 billion, ranking 183rd in global asset market capitalization. This year, MSTR has increased by about 37.1%, outperforming not only Bitcoin but also leading tech giants like Microsoft, Nvidia, Apple, and Amazon.
Q1 financial report shows a loss of over $4 billion, with over a thousand institutions holding shares.
MSTR-tracker data shows that as of May 16, Strategy holds a total of 568,840 BTC, with a year-to-date Bitcoin investment return of 15.65%. Based on the latest data, the estimated Bitcoin earnings per share (EPS) for this quarter is expected to reach $37.82.
However, in contrast to the substantial returns from Bitcoin, the financial performance of Strategy in the latest quarter was pressured by the late Q1 Bitcoin price pullback. The company's recently released Q1 2025 financial report shows a year-on-year revenue decline of 3.6% to $111.1 million, falling short of market expectations, with a net loss reaching as high as $4.23 billion (a loss of $16.49 per share), significantly exceeding market predictions.
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 market common stock issuance plan and has raised its BTC yield target from 15% to 25%, and its BTC dollar revenue target from $10 billion to $15 billion. Following that, Strategy further announced the launch of a new '42/42 Plan' aimed at raising $84 billion over the next two years for Bitcoin purchases. Wall Street analysts expressed support for this, with Benchmark and TD Cowen analysts reaffirming their buy ratings on the company, believing that its capital raising strategy is feasible.
Unlike most company stocks that correspond to the market sales performance of the company's products, Strategy's stock is positioned as a 'smart lever' for Bitcoin. Its founder Saylor elaborated on this narrative when the company was renamed Strategy. The gap between traditional assets (like SPDR S&P 500 ETF and Invesco QQQ Trust, which have volatility levels between 15-20) and Bitcoin (with volatility levels between 50-60) creates an area of about 45%. Strategy's common stock aims for a volatility level even higher than Bitcoin itself, targeting an 80-90 volatility level while maintaining what Saylor calls 'smart leverage' through a combination of equity issuance and convertible bonds.
Despite short-seller attacks, many large institutional investors are backing Strategy's strategy, and recent institutional bets on Strategy have boosted market confidence. According to Fintel data, so far, 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 this year's Q1, Citadel Advisors holds MSTR stocks worth 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 stocks valued at over $5.73 billion, approximately 1.988 million shares.
Jane Street
13F filings show that as of Q1 2025, one of the world's top hedge funds, Jane Street, holds over 16 million shares of MSTR, valued at nearly $4.63 billion.
Capital International
According to Capital International's 13F filing submitted this Q1, the institution holds nearly 14.68 million shares of MSTR, valued at approximately $4.23 billion.
BlackRock
As of Q1 this year, one of the world's largest asset management giants, 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 holds 357,000 shares of MSTR, valued at approximately $10.2 million.
