MW Explaining the Saylor-Chanos clash of Wall Street heavyweights over MicroStrategy

By Jules Rimmer

They are two figures who command legendary status on Wall Street.

In one corner stands Jim Chanos, a prominent investment manager who made his reputation with a history of controversial short-selling bets on the likes of Enron and Tesla $(TSLA)$ . In the other stands Michael Saylor, the executive chairman of the company that used to be called MicroStrategy (MSTR) , the stock synonymous with bitcoin (BTCUSD) , and the most passionate, well-known evangelist for the cryptocurrency.

What are they arguing about? Well, they aren't disputing the value of bitcoin per se. In May, Chanos addressed an investment conference in New York during which he detailed the rationale behind his trading strategy of short-selling what is now called Strategy and using the proceeds to invest in bitcoin directly.

Chanos contends that because MicroStrategy trades way in excess of the net asset value of its bitcoin holdings, this is essentially an arbitrage: "basically buying something for $1 and selling it for $2.50." MicroStrategy's share premium to NAV was as high as 2.5 times in 2024 and currently stands around 1.7 times.

For Chanos, the premium is a function of retail investors' frothy speculation, and he sees little to no value in the corporate wrapper Saylor uses to invest in bitcoin. The market capitalization of Strategy is $109 billion while its holding of 582,000 coins, ranking it among the top five globally, is worth $63 billion.

On Monday and Tuesday there has been some heated back-and-forth between the two investors with Saylor conducting an interview on Bloomberg TV to refute Chanos' arguments and explain his masterplan while Chanos took to posting on X to describe Saylor's strategy as "complete financial gibberish".

Saylor is adamant that Chanos fails to understand the business model, that it's "not a holding company or closed-end trust" but rather an operating company that has access to leverage. In the last year, Saylor has financially engineered several moves to fund purchases of bitcoin through sales of common stock, convertible bonds and preferred shares, and he committed to issuing more preferred stock to buy back shares in the open market were its NAV premium to decline significantly.

When it comes to the financial firepower available to back their bets, Saylor has the upper hand with Strategy's balance-sheet strength and large capitalization. Chanos, meanwhile, closed his hedge funds after a string of unsuccessful wagers and is now running a family office that was reported to have less than $200 million in assets in 2023.

However, since May when Chanos first aired his views publicly, his recommended pair trade - short MicroStrategy stock, long bitcoin - has performed well. The former is languishing some 7% below its 2025 peak of $421, while bitcoin is within 1% of its record high of $111,000 set on May 22nd.

-Jules Rimmer

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June 11, 2025 07:04 ET (11:04 GMT)

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