Jim Chanos Calls Strategy's Premium 'Financial Gibberish'
Chanos has placed a bet against Strategy's stock by shorting it while maintaining a long position in bitcoin itself, aiming to profit if the company's premium valuation shrinks. In shorting, a trader borrows stock, sells it and hopes the price falls enough for them to buy it back in time to return to the lender while leaving them with a profit.
The investor has earned a reputation for spotting corporate frauds and overvalued companies. Enron, once a major U.S. energy firm, collapsed amid massive accounting fraud, wiping out billions in value and sending top executives to prison, becoming a lasting symbol of corporate scandal.
He criticized the financial maneuvers of Strategy Executive Chairman Michael Saylor, who has sold convertible debt and preferred shares to raise money to buy more bitcoin, calling them 'financial gibberish' and warning that the sales create risks for shareholders. Strategy has accumulated more than 600,000 bitcoins, far surpassing its closest competitors.
In a debate on the We Study Billionaires podcast, Chanos clashed with Pierre Rochard, CEO of Bitcoin Bond Co. and a well-known bitcoin advocate, over Strategy's roughly 1.9 times net asset value premium.
According to Chanos, the company offers nothing unique beyond owning bitcoin, and contends the premium should disappear as more than 140 other firms worldwide, including MARA Holdings (MARA), Riot Platforms (RIOT) and Metaplanet (3350), pursue similar treasury strategies.
Rochard, however, sees Strategy's large bitcoin stash and first-mover advantage as key strengths. He argued the company can raise significant debt without diluting shareholders and that investors view Strategy as a leveraged play on BTC, akin to holding a call option for potential upside. Rochard also suggest that crypto-friendly policies under the administration of President Trump could attract more investment into the industry, boosting Strategy's appeal.
While Chanos insisted direct bitcoin ownership is safer and simpler, Rochard countered that Strategy's size enables it to leverage more efficiently than individual investors.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
3 hours ago
- Yahoo
Strategy Could Buy as Much as 7% of Bitcoin Supply, Says Michael Saylor
Bitcoin treasury company Strategy's co-founder Michael Saylor said on Friday that the Nasdaq-listed firm could end up holding upwards of 7% of the leading cryptocurrency's total supply of 21 million coins. But Saylor, who pioneered the Strategy's Bitcoin treasury plan, said that the company wouldn't aim to buy all of the digital asset because he wants "everyone else to have their piece," in an interview with CNBC. "I don't think we'll get all of [the Bitcoin]," said Saylor. "I don't think in the range of 3-5% or 3-7% is too much." "We wouldn't want to own all of it—we want everyone else to have their piece," he added. Strategy—formerly MicroStrategy—currently owns a little over 3% of the current 19,900,346 supply of Bitcoin. Only 21 million BTC will ever be minted, with the last coin expected to be created in the year 2140. The Tysons Corner, Virginia-based firm is the world's biggest corporate holder of Bitcoin, with 628,791 digital coins worth $72 billion at today's BTC price of $114,692. The company first started buying Bitcoin in 2020. Acquiring 7% of the total-ever Bitcoin supply would give the company 1.47 million BTC, currently valued at about $169 billion. Strategy struggled during the COVID-19 pandemic as inflation depleted its cash pile, so the firm went into survival mode in August 2020, pivoting from software development to accumulating Bitcoin. Saylor, who was Strategy's CEO at the time, has since called Bitcoin the supreme asset because it is scarce, and urged other companies to buy it to preserve capital. Strategy's share price was down more than 6% in Friday trading to trade below $380, the first time it has fallen below that threshold since early July. But the stock is up over 2,488% since the company's first Bitcoin purchase in August 2020. Strategy Reports $10 Billion Q2 Profit, Plans to Raise $4.2 Billion to Buy More Bitcoin Strategy now buys and holds Bitcoin, and investors buy its stock—MSTR—to get exposure to the cryptocurrency without having to hold it themselves. The company issues debt to fund its purchases. Saylor said in a second-quarter Thursday earnings call that the price of Bitcoin could still drop by 80% to 90% and the company would be able to handle the drawdown without selling its BTC. Myriad users broadly believe that Strategy will not dump any Bitcoin in the coming months, giving the firm a less than 8% chance of selling any BTC before the end of 2025. (Disclosure: Myriad is a product of Decrypt's parent company, DASTAN.) Strategy Stock Price Could Nearly Double as Bitcoin Treasury Aims to Dominate Market: Benchmark Benchmark analyst Mark Palmer on Friday raised the firm's price target for MSTR to $705, an 85% increase from its current share price. A number of smaller Nasdaq-listed companies have adopted the Bitcoin treasury plan. But some experts have warned that the crypto play can't help every company, and is inherently risky. Sign in to access your portfolio
Yahoo
3 hours ago
- Yahoo
Public Keys: Strategy Eyes Domination, Metaplanet Bitcoin Barrage, and Coinbase XRP Boost
Public Keys is a weekly roundup from Decrypt that tracks the key publicly traded crypto companies. This week: Strategy aims to go even bigger, Metaplanet get more ambitious with Bitcoin buying plans, and Coinbase highlights shifting altcoin drivers amid an earnings miss. Strategy Double Up Strategy wants its Bitcoin treasury to be the largest corporate treasury ever. And yes, that means the company is looking to overtake Warren Buffet's Berkshire Hathaway, which currently had a Scrooge McDuck-worthy $328 billion in cash and cash equivalents sitting in the bank as of Q1. We'll get a better idea of how much cash the Omaha Oracle is sitting on tomorrow, when his company publishes its Q2 results 'on the internet.' For Strategy to catch up, the company would need to see the value of its BTC holdings more than double. And if Bitcoin manages to hit the $225,000 target that Benchmark is forecasting for the end of 2026, paper gains could do the bulk of the work. Strategy Stock Price Could Nearly Double as Bitcoin Treasury Aims to Dominate Market: Benchmark Even if MSTR stopped buying Bitcoin—it won't, I know—its current 628,791 BTC would be worth $141 billion if the asset sees those kinds of gains in the next year. But we know Michael Saylor isn't done buying Bitcoin. In fact, he said during an interview with CNBC on Friday morning that the company is looking to own up to 7% of the total Bitcoin supply. "I don't think we'll get all of [the Bitcoin]. I don't think in the range of 3-5% or 3-7% is too much," he said. "We wouldn't want to own all of it—we want everyone else to have their piece," he said. To that end, the company said during its earnings call it plans to raise another $4.2 billion to buy Bitcoin this year with preferred stock offerings. Metaplanet's Bitcoin orbit Metaplanet, a company about 5% the size of its Bitcoin treasury idol Strategy, is raising almost as much money to buy Bitcoin. The company announced its $3.7 billion raise through a preferred stock offering on Friday. The perpetual preferred shares would pay up to 6% dividends, the company said. Metaplanet is giving itself two years to complete the raise. Keep in mind that the Japanese firm has previously said it wants to hold at least 210,000 BTC by the end of 2027. To do that, it will need to multiply its current holdings by twelvefold. If Metaplanet were able to magically pull that off now, it would easily be second only to MSTR as the largest corporate Bitcoin holder. Year-to-date, Metaplanet's share price has climbed a staggering 207% and an even more impressive 313% in the past year. But today, news of its monster raise didn't have investors feeling particularly bullish. Metaplanet, which trades as MTPLF on OTC and 3350 on the Tokyo Stock Exchange, dropped 7.65% during Friday's session, closing at $7.18, or 1,063 Yen. Coinbase runs out of alt gas Coinbase's earnings miss revealed that XRP has edged out Ethereum as a transaction revenue driver. The San Francisco-based crypto exchange reported $1.5 billion in revenue, a 25% dip from the previous quarter and 6% lower than analysts' forecasts of $1.59 billion, according to FactSet data. But XRP made a strong showing among traders, according to the company's Q2 shareholder letter. XRP accounted for 13% of consumer transaction revenue, beating out Ethereum's 12%. Alt season fervor aside, is it time to worry about Coinbase? Bernstein analysts don't think so. XRP Edges Out Ethereum in Coinbase Transaction Revenue as Token Shifts Persist The firm's analysts called Q2 the "quarter that doesn't matter" in their latest note, which reiterated their outperform rating and $510 price target. Coinbase is currently priced at $316. 'Improving crypto market structure and width with trading focus going beyond Bitcoin into Ethereum, Solana and other blockchains driven by stablecoins and asset tokenization,' the Bernstein analysts wrote in a note shared with Decrypt. 'This should drive improved trading volumes in H2, already reflected in guided July transaction revenues (~44% up vs. Q2 average).' They added that they're optimistic about the exchange's partnerships with leading banks, like its new deal with JP Morgan, helps to position the company as the 'leading AWS of crypto financial infra.' Other Keys Tokenization, tokenization: Unfortunately for Robinhood CEO Vlad Tenev, saying 'tokenization' 11 times during his company's earnings call won't make controversy over private company stock tokens disappear. But HOOD did see its revenue climb 45% in Q2, so there's that. Skipping AI: Bitcoin miner MARA Holdings caught some flak this week from for not making more of an effort to diversify its revenue beyond mining BTC. 'Everyone else is focused on HPC, and MARA is kind of in its own world,' Compass analyst Ed Engel told Decrypt. 'It's different from what others are doing.'
Yahoo
12 hours ago
- Yahoo
Red Coin, Blue Coin: The New Politics of Exposure
It was only a matter of time. With Strategy long reigning as the go-to corporate proxy for bitcoin exposure, it was inevitable that a challenger would emerge — though few expected it to wear a red hat and run a social media company. Trump Media & Technology Group's recent announcement that it holds roughly $2 billion in bitcoin has transformed it, overnight, into a serious — if unconventional — bitcoin-treasury company. But for investors seeking crypto exposure, the question isn't just about how much bitcoin a company holds. It's about what else comes with the package. In one corner, we have Strategy (formerly MicroStrategy): the bitcoin standard-bearer, helmed by Michael Saylor, who has spent the past four years turning a sleepy enterprise software company into a de facto digital gold vault. Saylor has become bitcoin's most prominent corporate evangelist, turning Strategy into a digital gold vault with quarterly earnings calls that double as bitcoin sermons. In the other corner, enter Trump Media (DJT), which operates the Truth Social platform and has a revenue stream you could mistake for a rounding error: $4.1 million in 2023, compared to Strategy's $498 million. Yet its market cap has floated above $6 billion — a valuation propped up almost entirely by brand loyalty, media spectacle, and now, bitcoin. Let's be clear: DJT didn't just buy some bitcoin. It bought a lot of it — enough to vault it into the upper echelon of corporate BTC holders. On paper, that makes it interesting. But this isn't your typical balance-sheet play. This is bitcoin by way of meme stock, populist vehicle, and culture war capital. And for investors looking for crypto exposure, it raises an uncomfortable — and increasingly unavoidable — question: What happens when your bitcoin proxy stock comes with a political identity? Strategy's bitcoin play, while bold, has always been pitched as a rational (some might say religious) hedge against inflation and fiat debasement. Its founder doesn't dabble in politics (outside of poking fun at altcoins), and the company isn't staging rallies or trending on Truth Social. It's all-in on bitcoin — not ideology. Trump Media, by contrast, is ideology-first. Its brand, valuation, and customer base are inseparable from Donald Trump's political identity. With bitcoin now making up the overwhelming majority of the company's assets, this is less a treasury decision than a wholesale pivot. But in practice, it functions more like a cultural signal — a declaration of alignment with the anti-establishment, pro-sovereignty values that animate its most loyal followers. That's not a bad strategy, necessarily. It might even be a brilliant one. The marriage of Trumpism and bitcoin isn't as odd as it sounds. Both reject centralized authority. Both thrive on defiance. Both are, depending on your viewpoint, revolutionary or rebellious — and always controversial. But for investors who simply want crypto exposure in their portfolio, the emergence of politically branded bitcoin stocks presents a new kind of risk. What happens when bitcoin becomes tribal? What happens when each side of the political aisle has its own bitcoin company, its own bitcoin ETF, its own financial media ecosystem? In this new paradigm, bitcoin exposure could become not just a financial choice, but a cultural affiliation. Imagine a left-leaning climate-tech firm launching 'Green Bitcoin Holdings, Inc.' to push eco-friendly mining. Or a libertarian group creating 'Freedom Ledger Corp.' to promote bitcoin as a tool for tax resistance and personal sovereignty. Bitcoin could become the financial equivalent of cable news: red coins, blue coins, and perpetual outrage. That's a far cry from bitcoin's original promise as a neutral, decentralized alternative to fiat. It was supposed to be trustless. Borderless. Immune to capture. But when its biggest corporate champions start behaving like political action committees it threatens to drag bitcoin into the very systems it was designed to transcend. So where does that leave investors? If you're looking for a relatively clean bitcoin proxy, Strategy still offers the clearest path. Its volatility is real — but it's the volatility of conviction. Trump Media, on the other hand, is a bet on narrative, loyalty, and virality. It might outperform in the short term. It might even spark a whole new class of politically-infused crypto equities. But it's no longer just about bitcoin. It's about who owns the story around bitcoin. The final irony? Bitcoin itself doesn't care. It doesn't care who your CEO is. It doesn't care who your president is. It just keeps producing blocks, one every ten minutes, indifferent to spin, slogans, or Senate hearings (until 21 million is reached – at which point the political tribe with the biggest BTC treasury wins?). But investors do care. And as bitcoin enters this new phase of cultural colonization, we'd all be wise to ask: Are we buying the coin — or the campaign?
