Outperforming Bitcoin and Leaving Tech Giants Behind! What Exactly is MicroStrategy Up To?
As Bitcoin prices return to the $100,000 high, and MSTR stock prices continue to rise, market divergences regarding the valuation of Strategy (formerly MicroStrategy) are accelerating.
On one hand, several global large institutions are quietly increasing their holdings of MSTR stock, viewing it as an important financial tool for indirectly allocating Bitcoin; on the other hand, its highly volatile and deeply leveraged asset structure has also attracted the targeting of Wall Street shorts.
As Strategy continues to increase its Bitcoin exposure, it is evolving into a bellwether for Bitcoin price trends and a focal point in the capital leverage game.
Stock Price Outperforms Tech Giants, Caught Attention of 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 $2.5.'
He pointed out that Strategy holds over 500,000 Bitcoins through high leverage, with the current stock price showing a high premium compared to actual holdings. He criticized the emergence of a group of companies imitating Strategy in the market, selling the concept of buying Bitcoin through corporate structures to retail investors in pursuit of 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 transaction is a 'barometer' for observing retail speculative behavior.
Chanos is a well-known investor with significant influence on Wall Street. As the founder of the short-focused hedge fund Kynikos Associates, he is known for his deep fundamental analysis and keen ability to identify financial fraud and business model flaws. Classic short cases include Enron, WorldCom, and Luckin Coffee. However, in recent years, he has suffered severe losses from shorting Tesla, leading some funds to close or adjust their strategies.
Notably, this is not the first time Strategy has been targeted by well-known short sellers. In December last year, the well-known short-selling firm Citron Research announced it was shorting Strategy, although it maintained a bullish outlook on Bitcoin overall, believing MSTR had seriously deviated from Bitcoin's fundamentals. This news once led to a sharp drop in MSTR, but due to the rise in Bitcoin boosting market sentiment and MSTR being included in the NASDAQ-100 index, enhancing market visibility and liquidity, the shorting ultimately failed.
Recently, in addition to external short-selling pressures, Strategy's executives have also frequently reduced their shareholdings. According to disclosures, Jarrod M. Patten, who has served as a director for over 20 years, has sold approximately $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, the current total market capitalization of Strategy has reached $109.82 billion, ranking 183rd globally in asset market value. This year, MSTR has risen approximately 37.1%, outperforming Bitcoin and leading tech giants such as Microsoft, Nvidia, Apple, and Amazon.
Q1 Financial Report Shows a Massive Loss of Over $4 Billion, Backed by Over a Thousand Institutional Holders
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 expected earnings per share (EPS) for Bitcoin this quarter is $37.82.
However, contrasting with the considerable Bitcoin returns, Strategy's latest quarterly financial performance was under pressure due to the late Q1 Bitcoin price pullback. The company's recently released Q1 2025 financial report shows a revenue decline of 3.6% year-over-year to $111.1 million, falling short of market expectations, with a net loss of $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.
Following this, 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 have expressed support, with analysts from Benchmark and TD Cowen reaffirming their buy ratings for the company, believing 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 'smart leverage' on Bitcoin. Its founder Saylor elaborated on this narrative when the company was renamed to Strategy. There is a gap of about 45% between traditional assets (such as SPDR S&P 500 ETF and Invesco QQQ Trust, with volatility levels between 15-20) and Bitcoin (volatility levels between 50-60).
The ordinary share target volatility of Strategy is even higher than that of Bitcoin itself, aiming to reach a volatility level of 80-90 while maintaining what Saylor calls 'smart leverage' through a combination of equity issuance and convertible bonds.
Despite short-selling pressures, many large institutional investors are also betting on Strategy's strategy, which has recently bolstered market confidence. Fintel data shows that to date, a total of 1,487 institutions hold Strategy stock, with a combined holding of 13.9 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 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 firm 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 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 filing submitted by Capital International for 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 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.
This article is a collaborative repost from: PANews
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