Jimmy Chanos shorts MicroStrategy while buying Bitcoin, calls the stock overpriced hype

Jimmy Chanos is dumping MicroStrategy (now rebranded to ‘Strategy’) shares and just straight up buying Bitcoin instead.

Speaking to CNBC’s Scott Wapner during the Sohn Investment Conference in New York on Tuesday night, Jim explained he’s selling the company’s stock and buying the crypto directly because the tactic used by Strategy is overpriced and built on inflated assumptions.

Jim, who used to run Kynikos Associates and now advises institutional investors from his family office, explained that Strategy’s business model no longer looks like real software. The company, run by chairman Michael Saylor, has turned into a public wrapper around a crypto wallet.

The company currently holds over 500,000 Bitcoin, but Jim said the problem isn’t the asset; it’s how MicroStrategy structured the whole thing. The company borrowed heavily to buy its Bitcoin stash, then started trading at prices way above what its Bitcoin holdings are worth.

Jim Chanos says Strategy misleads retail investors

Jimmy also called out how MicroStrategy and other companies are selling the idea of holding crypto inside a corporate body. He said they are basically telling retail investors that they should assign a high valuation to these companies just because they hold Bitcoin.

“If you look at where MicroStrategy and now, more ominously, some of its copycat companies that are now raising lots of money are doing is they are basically selling retail investors the idea that we are going to buy bitcoin in a corporate structure. Because of what MicroStrategy has done, you should value us at a similar premium,” Jimmy said. He called that idea “ridiculous.”

Instead of buying into that pitch, Jim said he’s taking the other side. He’s shorting MicroStrategy stock while buying Bitcoin itself. “We’re doing exactly what MicroStrategy and Michael Saylor are doing,” he said. “We’re selling MicroStrategy stock and buying bitcoin and basically buying something for $1, selling it for two and a half dollars.”

Jimmy believes this setup works in his favor because it exposes the disconnect between the company’s market price and the value of what it owns. And the numbers back that up. 

Strategy stock has jumped more than 220% over the last year, while Bitcoin only went up 70% in that same period. That’s why Jim said his trade is a “good barometer of not only just of the arbitrage itself, but I think of retail speculation.”

He didn’t talk much about President Trump during the interview, but the crypto rally since early April has been mainly tied to the President’s tariff announcement. Trump has shown public support for crypto during this period, and prices have followed the tone from his administration.

At least for a few months anyway, since as Cryptopolitan reported this morning, the market has actually stopped caring about Trump after he pulled one too many insider trading tricks.

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