Although they’d hate to admit it, even Michael Saylor’s biggest fans would agree that Jim Chanos’ bearish Strategy (MSTR) trade this year has been exceptionally profitable.
Chanos sold shares short and fully hedged that short-sale with a long bitcoin (BTC) position.
In other words, rather than betting against MSTR’s overvaluation on an absolute basis, he merely prepared for its premium relative to its BTC holdings to collapse.
It has.
On May 14 at the 2025 New York Sohn Investment Conference, Chanos explained that he’d been building his short position in Strategy (formerly MicroStrategy) since its 2.5x mNAV in November 2024.
On numerous podcasts and interviews over the past few months, he’s reiterated that his overall cost basis is above 2x mNAV.
That’s a terrific cost basis for someone betting a low-single digit percentage of his fund on the price of MSTR declining. As of today, MSTR’s basic mNAV has declined to 1.42x, and its newly-introduced enterprise value mNAV is 1.63x.
The acronym mNAV refers to the multiple of Strategy’s market capitalization to its colloquial net asset value (NAV). Even though companies don’t have a NAV, technically speaking, crypto investors colloquially refer to a company’s crypto holdings as its NAV.
Strategy’s NAV is approximately $70 billion.
Needless to say, Chanos’ trade has been very profitable.
Any shares he sold short at 2.5x mNAV are worth at least 34% more today below 1.64x. For a fund manager benchmarking to the returns of the S&P 500 Index since November 1, 2024, that 34% gain outperforms his benchmark by an impressive 2,100 basis points.
Even shares sold short at 2x mNAV have outperformed the S&P by at least 500 basis points.
Buying something for $1, selling it for $2.50
Of course, Chanos’ two-pronged trade involves margin costs and management fees, so he’s paid out some of those basis points to execute his strategy.
Overall and depending on the assumptions you make about his cost basis and fees, Jim Chanos’ hedged MSTR short-sale position is probably up 15-35% versus the S&P’s 13% gain since November 1, 2024.
This range assumes that Chanos didn’t avail himself of margin to multiply his position on leverage.
Read more: Michael Saylor says bitcoin credit now has a yield curve — thanks to him
On the day of the Sohn NYC conference, Chanos told CNBC News, “We’re selling MicroStrategy stock and buying BTC and basically buying something for $1 selling it for $2.50.”
In addition to his gains from his hedged short-sale, Chanos has also succeeded at advertising himself and his fund through his bearish media tour.
Continuing his career as a skeptical short-seller and risking less than 10% of his fund on the actual trade, Chanos has appeared on numerous podcasts and video interviews about his bet against Saylor’s BTC treasury company.
In all, Chanos has succeeded alongside Saylor himself. Like Saylor, he buys BTC and sells MSTR.
The main difference between the pair is their long-term plan. Whereas Saylor plans to buy BTC and sell MSTR forever, Chanos plans to eventually cover his short and sell BTC to close that hedge.
