According to Bloomberg, Wall Street’s prominent short-seller and founder of investment advisory firm Chanos & Company, Jim Chanos, has condemned Michael Saylor, the founder of American software company Strategy, for using misleading models to value his company. Chanos reiterated his recommendation to short Strategy’s stock and instead directly purchase Bitcoin (BTC).
In an interview with Bloomberg Television on Wednesday, Chanos stated, “Michael Saylor is a great salesman,” although the chairman of Strategy claims that his company should not be judged solely on its Bitcoin holdings. Chanos dismissed this assertion as “financial nonsense.”
Chanos also criticized Saylor’s claim that issuing preferred stock is a powerful fundraising avenue, pointing out that the preferred stock market is actually “very small” compared to common stock.
Since 2024, Strategy has sold approximately $35 billion worth of securities to fund its Bitcoin purchases, including $33 billion in common stock and convertible bonds, as well as about $2 billion in preferred stock issued in recent months.
Related Report: “Strategy Plans to Issue 2.5 Million Shares of ‘Stride’ Preferred Stock to Raise Funds for Expanding Bitcoin Reserves”
Chanos noted that the company’s so-called mNAV (the premium of the stock relative to the value of its Bitcoin holdings) is currently about 1.8 times, close to the historical average, whereas it “should be 1 time.” He added that he would establish a short position when this multiple is between 2.2 and 2.3 times and advised clients to do the same.
Saylor had previously stated that if the premium drops low enough, Strategy would repurchase its common stock. Chanos remarked, “I can assure you, if it drops below 1 time, I will cover my short position.”
Last week, Strategy made its latest Bitcoin purchase, spending approximately $110.2 million to acquire 1,045 Bitcoins, bringing its total holdings to 582,000 Bitcoins at an average purchase price of around $70,086. As of the time of this publication, Bitcoin was trading at about $107,900, which values Strategy’s Bitcoin position at $62.7 billion.
Related Reports: “Legendary Short-Seller Jim Chanos Engages in Arbitrage: Buying Bitcoin While Shorting Strategy” “Public Companies Rush to Mimic ‘Bitcoin Reserve Strategy’; Why Are Venture Funds Willing to Invest?” “Opinion: Public Companies Raising Funds to Buy Bitcoin is ‘Toxic’ Leverage”
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