Author: Nancy, PANews
As Bitcoin prices return to the $100,000 highs, 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 stock, viewing it as an important financial tool for indirect allocation of Bitcoin; on the other hand, its highly volatile and deeply leveraged asset structure has also attracted the attention of Wall Street short-sellers. As Strategy continues to ramp up its Bitcoin exposure, it is evolving into a barometer for Bitcoin price trends and the focus of capital leverage games.
Stock price outperforms tech giants, targeted by Wall Street's big 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 $2.50.'
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, selling the concept of purchasing Bitcoin through corporate structures to retail investors in order to seek high valuations, calling this logic 'absurd.'
In the past year, the price of MicroStrategy has risen over 220%, while Bitcoin has only increased by about 70%. Chanos believes that this trade is a 'barometer' for observing retail speculative behavior.
Chanos is a highly influential and well-known investor on Wall Street, and as the founder of the short-focused hedge fund Kynikos Associates, he is known for his in-depth fundamental analysis and keen ability to identify corporate financial fraud and business model flaws. Classic short cases include Enron, WorldCom, and Luckin Coffee. However, in recent years he has faced significant losses from shorting Tesla, leading some funds to close or adjust their strategies.
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 well-known short-seller Citron Research announced a short position on Strategy. Despite its overall bullish view on Bitcoin, it believed that MSTR had seriously deviated from Bitcoin's fundamentals. This news once led to a sharp short-term decline in MSTR, but due to the rise in Bitcoin boosting market sentiment, and the inclusion of MSTR in the Nasdaq 100 index leading to increased market visibility and liquidity, this short-selling ultimately failed.
Recently, in addition to external short-selling pressure, senior executives at Strategy have also frequently reduced their holdings. It has been disclosed that Jarrod M. Patten, who has served on the company’s board for over 20 years, has cumulatively sold approximately $5.2 million in stock since April of this year and plans to continue selling $300,000 this week.
Despite this, MSTR's recent stock performance remains strong. According to MSTR-tracker data, Strategy's total market value currently reaches $109.82 billion, ranking 183rd in global asset market value. This year, MSTR has increased by approximately 37.1%, outpacing Bitcoin and leading tech giants like Microsoft, NVIDIA, Apple, and Amazon.
Q1 financial report suffers a massive 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, it is estimated that the earnings per share (EPS) for Bitcoin this quarter will reach $37.82.
However, in contrast to the considerable Bitcoin return, Strategy's latest quarterly financial performance has been pressured due to the Bitcoin price pullback in the late first quarter of this year. The company's recently released Q1 2025 financial report shows revenue decreased by 3.6% year-over-year to $111.1 million, falling short of market expectations, with a net loss of as much as $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 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. 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 ratings on 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 the 'smart leverage' of Bitcoin. Its founder, Saylor, elaborated on this narrative when the company was renamed to Strategy. There is an approximately 45% 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). The target volatility of Strategy's common stock is even higher than that of 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.
Although there are short-selling attacks, many large institutional investors are also buying into Strategy's strategies, and the recent bets from institutional investors have bolstered market confidence. Fintel data shows that to date, a total of 1,487 institutions hold Strategy stocks, 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 Q1 this year, Citadel Advisors holds MSTR stocks valued at over $6.69 billion, approximately 23.22 million shares, making it one of the largest shareholders of Strategy.
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 MSTR stock held by the company is valued at over $5.73 billion, approximately 19.88 million shares.
Jane Street
The 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 the 13F filings submitted by Capital International in Q1 this year, 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 largest asset management giants in the world, 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.
(The above content is excerpted and reprinted with permission from our partner PANews. Original link)
"Strategy's Bitcoin leverage game: Wall Street short-sellers attack while large institutions bet on shares" was first published in (Block客).
