Source: Wall Street Insights
A fierce debate about corporate strategy, asset value, and financial innovation is unfolding on Wall Street. The core of the dispute is Strategy (MSTR) under Michael Saylor's leadership and its aggressive strategy of accumulating large amounts of Bitcoin through high leverage.
On one side of this confrontation is Jim Chanos, the legendary short seller famous for shorting Enron, who dismisses this move as "financial nonsense"; on the other side is Saylor, who has transformed the company into a crypto giant and views this as a revolution to achieve thousand-fold returns using others' capital.
Chanos recently stated directly in a media podcast that Strategy's business model is "completely unreasonable". He repeatedly emphasized his core argument: as a company holding Bitcoin, its stock price should not enjoy a premium above its asset value. This view directly challenges the market frenzy that has driven Strategy's stock price up 210% over the past year.
In stark contrast is Saylor's strong counterattack. He believes that for many investors, buying Strategy's stock is a more convenient and compliant way to invest in Bitcoin or related ETFs. More importantly, he paints a blueprint for the market of amplifying returns through leverage:
"If you want to make 10x, you buy Bitcoin. If you want to make 100x, you buy Bitcoin with other people's money. If you want to make 1000x, you buy Bitcoin with other people's money and then leverage the Bitcoin."
So far, the market performance seems to be on Saylor's side. Strategy's stock price has far outperformed Bitcoin's approximately 80% and the S&P 500's 13% gains. According to data provider S3 Partners, short sellers of Strategy have suffered losses of up to $3.6 billion in the past month alone. However, this debate is not just about the views of two individuals, but reveals a new trend spreading in the corporate world and its potential risks.
The Short Seller's Core Argument: The Mystery of MSTR's Premium
Jim Chanos's challenge to Strategy centers on its high valuation premium. As an investor known for discovering and shorting companies with mismatched valuations, Chanos believes investors would be better off buying Bitcoin directly rather than purchasing a Bitcoin-holding company's stock at an inflated price.
Data shows that as of June 30, Strategy has accumulated 597,325 Bitcoins on its balance sheet through stock and convertible debt issuance, valued at approximately $64 billion, making it the world's largest corporate Bitcoin holder. However, its stock performance has far exceeded the growth of its underlying assets. This phenomenon is the focus of market skeptics like Chanos, who believe this premium lacks solid logical support.
Saylor's Counterattack: A Crypto Revolution Leveraged
In response to the doubts, Michael Saylor and his supporters present two core arguments.
First is compliance and convenience, arguing that Strategy's stock provides a compliant investment channel for investors with regulatory restrictions. Second, supporters believe that because Bitcoin's supply is capped at 21 million, Strategy's continued accumulation will give it a larger share of this scarce asset, thus supporting its stock price premium.
Saylor himself more bluntly advocates his leverage strategy. He publicly stated his disdain for Chanos's criticism, saying "I don't think he understands our business model" and predicting "if our stock rises, he will be liquidated and pushed out".
Chanos, in turn, defines Saylor's statements as "financial nonsense", calling him "a great salesman, and that's it". This confrontation, conducted through media, has become a hot topic on Wall Street.
Growing Doubts and Legal Headwinds
Despite heavy losses for short sellers, Chanos is not alone. In May and June this year, a federal court in Virginia accepted two investor lawsuits against Strategy. According to media reports, both lawsuits allege that the company misled investors about the potential impact of Bitcoin price fluctuations on its stock price.
Some analysts have also expressed concerns. Gustavo Gala from Monness, Crespi, Hardt & Co noted in a series of recent client reports that Strategy's premium might decrease due to limited interest from fixed-income investors in the company's convertible debt and preferred stocks. He wrote in early June that the company has a "limited runway" to continue its current strategy.
Wave of Imitators and New Battlegrounds
Strategy's approach is spawning a wave of imitation. From Trump family-controlled media companies to popular meme stock GameStop, dozens of companies have begun to emulate Saylor's "Bitcoin treasury" blueprint. Gala warned in a Tuesday report that "all these companies are competing for an apparently similar funding pool", intensifying competition.
According to data provider Bitcoin Treasuries, listed companies added a total of 245,191 Bitcoins to their balance sheets in the first half of 2025, more than double the increase in Bitcoin ETF holdings during the same period. The latest heavyweight entrant is Tom Lee, founder of Fundstrat, who will serve as chairman of Bitcoin mining company BitMine Emersion Technologies (BMNR), having previously helped the company raise $250 million with other institutions to launch an Ethereum-centric treasury strategy. Since the news was announced on June 30, BitMine's stock has soared over 30 times.
Interestingly, short sellers have found success on another battlefield. S3 Partners' data shows that shorting Saylor's imitators has been more profitable than shorting Saylor's own company. In June alone, short sellers gained $549 million by shorting Strategy's four major imitators. This indicates that while the market is enthusiastic about the leader, it remains more cautious and skeptical of its followers.
