Jim Chanos Takes Aim at Strategy Premium, Calling Valuation Practices ‘Financial Gibberish’
Veteran short-seller Jim Chanos has disclosed a short position in Strategy (MSTR), criticizing the company’s sizable premium over its underlying bitcoin holdings. While Chanos remains long on bitcoin itself, he believes Strategy’s equity is significantly overvalued and vulnerable to correction.
Speaking on the We Study Billionaires podcast, Chanos explained that Strategy currently trades at nearly 1.9 times the value of its bitcoin reserves—a gap he sees as unjustified. His trade structure reflects that view: shorting MSTR while maintaining a long position in BTC.
Chanos took particular issue with Executive Chairman Michael Saylor’s approach to corporate financing, describing Strategy’s issuance of convertible debt and preferred shares to buy additional bitcoin as “financial gibberish.” He argued that these maneuvers increase risk for shareholders without delivering proportional returns.
Defending Strategy’s valuation, Bitcoin Bond Co. CEO Pierre Rochard cited the firm’s status as an early bitcoin adopter, brand strength, and unique access to public capital markets as reasons for its premium. He pointed out that many investors prefer equity-based exposure to bitcoin over direct custody, especially in regulated portfolios.
Rochard also emphasized the company’s ability to raise capital with minimal dilution and the regulatory clarity it offers to institutional investors.
Still, Chanos warned that Strategy’s edge is narrowing. He noted that more than 140 publicly listed firms—including Marathon Digital, Riot Platforms, and Japan-based Metaplanet—are now implementing similar bitcoin accumulation strategies, reducing Strategy’s relative advantage.
In Chanos’ view, the market is overestimating Strategy’s value proposition. He believes the spread between the company’s market cap and the value of its bitcoin holdings is likely to compress—presenting a compelling opportunity for traders focused on structural inefficiencies in crypto-related equities.
