Jim Chanos said he is implementing a strategy to short MicroStrategy stock while buying Bitcoin, a trade based on the arbitrage between the stock price and the company’s net asset value (NAV).
Chanos emphasized that he isn’t predicting Bitcoin’s price direction—whether it goes to $10,000, $100,000, or $1 million—since no one knows for sure. However, he believes selling $1 to gain $2.5 or $3 is a profitable strategy.
He warned that MicroStrategy and copycat companies are exploiting this model to raise capital from retail investors, assuming that buying Bitcoin within a corporate structure justifies a higher stock valuation. He considers this logic “absurd.”
He views the premium (the gap between stock price and NAV) as a barometer of market speculation, particularly among retail investors. When the premium spikes, as seen in late 2024 or during recent market volatility, it reflects heightened speculative fervor. 0 reply
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