Running Ahead of Bitcoin, Outperforming Tech Giants! What Game is MicroStrategy Playing?
As Bitcoin prices return to the $100,000 high and MSTR shares continue to rise, the market’s divergence regarding 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 exposure; on the other hand, its highly volatile and deeply leveraged asset structure has attracted the attention of short sellers on 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 Prices Outperforming Tech Giants, Targeted by Major Short Sellers
At the recent Sohn Investment Conference in New York, Wall Street’s legendary 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 $1 to buy, $2.5 to sell.”
He pointed out that Strategy holds over 500,000 Bitcoins through high leverage, with its stock price currently trading at a significant premium relative to its actual holdings. He criticized the emergence of a number of companies imitating Strategy, selling the concept of buying Bitcoin through corporate structures to retail investors in order to achieve high valuations, deeming this logic “absurd.”
Over the past year, MicroStrategy’s stock price has risen over 220%, while Bitcoin has only increased by about 70%. Chanos believes this trade serves as a “barometer” for observing retail speculative behavior.
Chanos is one of the most influential investors on Wall Street, known for his short-selling strategies as the founder of Kynikos Associates, a hedge fund focused on shorting stocks. He is renowned for his deep fundamental analysis and keen ability to identify corporate financial fraud and business model flaws, with classic shorting cases including Enron, WorldCom, and Luckin Coffee. However, in recent years, he has suffered significant losses from shorting Tesla, leading to the closure or strategic adjustment of some of his funds.
It is worth noting that this is not the first time Strategy has become a target for well-known short sellers. In December of last year, the notable short-selling firm Citrin Research announced it was shorting Strategy, despite having an overall bullish outlook on Bitcoin, arguing that MSTR had seriously diverged from Bitcoin’s fundamentals. This news led to a significant short-term drop in MSTR, but the subsequent rise in Bitcoin boosted market sentiment, and MSTR’s inclusion in the Nasdaq 100 index enhanced its market visibility and liquidity, ultimately resulting in the failure of this short position.
Recently, apart from external short-selling pressures, Strategy’s senior executives have also been frequently reducing their shareholdings. Reports indicate that Jarrod M. Patten, who has served as a director of the company for over 20 years, has sold approximately $5.2 million worth of stock since April of this year and plans to continue reducing his holdings by $300,000 this week.
Nevertheless, MSTR’s stock price has remained robust. According to MSTR-tracker data, Strategy’s total market capitalization currently stands at $109.82 billion, ranking 183rd globally in asset market value. This year, MSTR has cumulatively increased by approximately 37.1%, outperforming Bitcoin and leading tech giants such as Microsoft, NVIDIA, Apple, and Amazon.
Q1 Financial Report Shows Over $4 Billion Loss, Backed by Over a Thousand Institutional Investors
MSTR-tracker data indicates that as of May 16, Strategy holds 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 $37.82.
In contrast to the impressive Bitcoin return rates, Strategy’s latest quarterly financial performance has been pressured by the decline in Bitcoin prices in late Q1 of this year. The company’s recently released Q1 2025 financial report shows a 3.6% year-on-year decrease in revenue to $111.1 million, falling short of market expectations, while the net loss reached a staggering $4.23 billion (with a loss per share of $16.49), significantly exceeding market forecasts.
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%, while increasing the BTC dollar yield 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 for Bitcoin purchases. Wall Street analysts expressed support for this, with Benchmark and TD Cowen analysts reiterating their buy ratings on the company, believing its capital fundraising strategy is feasible.
Unlike most companies whose stock corresponds to their market sales performance, Strategy’s stock is positioned as “intelligent leverage” for Bitcoin. Its founder Saylor elaborated on this narrative when the company rebranded to Strategy. The volatility levels of traditional assets (such as SPDR S&P 500 ETF and Invesco QQQ Trust, which have volatility levels between 15-20) compared to Bitcoin (with volatility levels between 50-60) create a gap of approximately 45%.
Strategy’s common stock aims for volatility even higher than Bitcoin itself, targeting a volatility level of 80-90, while maintaining what Saylor calls “intelligent leverage” through a combination of equity issuance and convertible bonds.
Despite the short-seller attacks, many large institutional investors are also betting on Strategy’s strategy, which has recently boosted market confidence. Fintel data shows that to date, a total of 1,487 institutions hold Strategy shares, totaling 139 million shares, with a current total value of approximately $55.175 billion.
Citadel Advisors
Citadel Advisors is one of the largest hedge funds in the world. According to the 13F filing, as of Q1 of this year, Citadel Advisors held MSTR shares worth over $6.69 billion, approximately 23.22 million shares, making it one of Strategy’s largest shareholders.
Vanguard Group
As of Q1 2025, Vanguard Group, one of the largest public mutual fund management companies globally, held approximately 20.58 million shares of MSTR, valued at over $5.93 billion.
Susquehanna International Group
Susquehanna International Group is a well-known hedge fund company globally. As of Q1 2025, the company held MSTR shares worth over $5.73 billion, approximately 19.88 million shares.
Jane Street
According to the 13F filing, as of Q1 2025, Jane Street, one of the top hedge funds globally, held 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 of this year, the institution holds nearly 14.68 million shares of MSTR, valued at approximately $4.23 billion.
BlackRock
As of Q1 of this year, BlackRock, one of the largest asset management giants globally, held 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 $10.2 million.
This article is a collaborative reproduction from: PANews