Legendary short seller James Chanos is once again raising alarms about Strategy $MSTR ( ▲ 3.83% ) as concerns grow over the digital asset treasury model. Strategy holds about 650,000 bitcoin $BTC.X ( ▲ 1.89% ) , but its mNAV has compressed to levels that resemble the 2022 crypto winter. The metric compares the company’s market cap to the value of its bitcoin stack and signals whether shares trade at a premium or discount.
Chanos argues the entire DAT model is flawed. He called it “silly,” saying investors should buy bitcoin directly rather than through a leveraged corporate vehicle. He added that raising debt to buy more bitcoin does not add value and only adds risk. While he does not share Peter Schiff’s extreme view that Strategy will go bankrupt, Chanos still questions why investors keep buying the stock.
Even so, many analysts say Strategy is far from distressed. The company created a 1.44 billion dollar reserve this month to cover interest and preferred dividends, which reduces short-term pressure and makes near-term bitcoin sales less likely. Benchmark analyst Mark Palmer noted that Strategy’s debt equals about 14 percent of the value of its bitcoin holdings, giving the business a large buffer against volatility.
Critics warn that the bigger risk is not a single bitcoin level but the company’s ability to refinance debt if bitcoin remains depressed for an extended period. Others say the panic is premature. Strategy traded below 1x mNAV during the last bear market without financial trouble, and the company would likely issue equity before selling bitcoin. With an average purchase price of 74,400 dollars per bitcoin, Strategy is not underwater yet, and analysts say the company is still positioned to survive the downturn.