Jim Chanos Critiques Strategy Inc.'s Preferred Shares Amid Stock Decline
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy MSTR?
Source: Benzinga
- Stock Price Decline: Strategy Inc.'s Class A shares have plunged over 16% year-to-date and more than 60% over the past year, indicating the company's vulnerability amid a downturn in the Bitcoin market, resulting in a market valuation of $41.99 billion, which is below its Bitcoin assets valued at $48.17 billion.
- Preferred Shares Controversy: Despite CEO Phong Le claiming that the perpetual preferred shares closing at $100 is the 'story of the day,' short seller Jim Chanos expressed skepticism, arguing that such statements from a CEO with a plummeting stock are inappropriate, reflecting the company's dire financial situation.
- Cash Flow Assurance: Strategy executives assert that the company has 2.5 years of cash flow to cover dividends and debt, even amid risks of Bitcoin potentially dropping to $8,000, indicating a conservative financial management approach aimed at avoiding further liquidity pressures.
- Arbitrage Trading Strategy: Chanos has engaged in an arbitrage strategy by shorting MSTR stock while going long on Bitcoin, believing that the premium on MSTR relative to its Bitcoin holdings is unjustified and will dilute over time as the company continues to issue common equity, showcasing his deep market insights.
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Analyst Views on MSTR
Wall Street analysts forecast MSTR stock price to rise
14 Analyst Rating
12 Buy
2 Hold
0 Sell
Strong Buy
Current: 123.000
Low
229.00
Averages
453.17
High
705.00
Current: 123.000
Low
229.00
Averages
453.17
High
705.00
About MSTR
Strategy Inc., formerly MicroStrategy Incorporated, is a bitcoin treasury and business intelligence company. The Company provides cloud-native, artificial intelligence (AI)-powered enterprise analytics software to thousands of global customers. The Company’s Strategy ONE platform provides access to AI-powered workflows, unlimited data sources, cloud-native technologies, and performance to speed up time from data to action. Strategy One delivers visualization, reporting, and embedded analytics capabilities across retail, banking, technology, manufacturing, insurance, consulting, healthcare, telecommunications, and the public sector. Its Strategy Mosaic is a universal intelligence layer that provides enterprises with consistent definitions and governance across data sources, regardless of where that data resides or which tools access it. The Strategy Mosaic offers data clarity and connection by eliminating trade-offs between flexibility, control, and speed.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Bitcoin Treasury Companies Face Challenges Amid Price Drop
- Bitcoin Holdings: As of early February, Strategy held 713,502 bitcoins valued at approximately $50 billion, showcasing its significant influence in the Bitcoin market; however, with a 45% drop in Bitcoin prices, the value of its assets is under pressure.
- Financial Losses: Strategy reported a staggering $12.4 billion loss in Q4 2025 primarily due to impairment on its Bitcoin holdings, complicating the company's operations in the current market environment.
- Stock Price Decline: The stock price of Strategy has plummeted about 60% over the past 12 months, recently hitting an 18-month low of $104, which restricts the company's ability to finance Bitcoin purchases through stock issuance.
- Investment Advice: Given the current market conditions, analysts recommend that investors buy Bitcoin directly rather than holding Strategy stock, as its market cap of $40 billion is now less than the value of its Bitcoin holdings at $50 billion.
See More
Analysis of Strategy's Bitcoin Investment Status
- Bitcoin Holdings: Strategy has accumulated 714,644 bitcoins over the past five years, valued at approximately $50 billion, but with a cost basis of $76,056 each, the current price below $70,000 puts significant pressure on its balance sheet.
- Financial Losses: In Q4 2025, Strategy reported a staggering $12.4 billion loss primarily due to impairment on its Bitcoin holdings, leading to a 60% decline in its stock price over the past 12 months, recently hitting an 18-month low of $104.
- Market Competition: With Bitcoin's price dropping 45% in the last four months, investors are now more inclined to buy Bitcoin directly rather than through treasury companies, further dimming Strategy's market outlook.
- Investment Advice: Analysts recommend viewing Strategy's stock as a sell until Bitcoin prices recover significantly, noting that it was not included in Motley Fool's list of top stocks, indicating a decline in its investment appeal.
See More
Strategic Outlook for Bitcoin Companies Dims Amid Price Decline
- Bitcoin Holdings: As of early February, Strategy holds 713,502 bitcoins valued at approximately $50 billion at current prices, showcasing its significant influence in the Bitcoin market; however, the declining price puts pressure on the value of its assets.
- Financial Losses: The company reported a staggering $12.4 billion loss for Q4 2025 primarily due to impairment on its Bitcoin holdings, leading to a 60% drop in its stock over the past year, recently hitting an 18-month low of $104.
- Market Outlook: With Bitcoin prices down 45% over the past four months, investor confidence in Strategy has waned, prompting analysts to recommend buying Bitcoin directly rather than holding Strategy stock, reflecting a pessimistic outlook on its future.
- Investment Advice: The Motley Fool analyst team did not include Strategy in their current list of top stocks to buy, indicating that until Bitcoin prices recover significantly, Strategy stock is viewed as a sell, urging investors to proceed with caution.
See More
U.S. Stocks Close Higher as Software Stocks Recover
- Market Recovery: The S&P 500 index rose by 0.05%, the Dow Jones Industrial Average by 0.10%, and the Nasdaq 100 by 0.18% on Friday, indicating a recovery after early losses, reflecting cautious optimism among investors regarding future economic prospects.
- Inflation Data Impact: The U.S. January Consumer Price Index rose by 2.4% year-over-year, below the expected 2.5%, marking the smallest increase in seven months, which may prompt the Fed to continue cutting rates, thus providing support for the stock market and alleviating concerns over rate hikes.
- Strong Software Stock Performance: Software stocks like Crowdstrike Holdings and ServiceNow rose over 4% and 3%, respectively, lifting the broader market and indicating a rebound in investor confidence in tech stocks, particularly amid rapid advancements in AI technology.
- Metal Stocks Retreat: Reports of the Trump administration's plans to narrow tariffs on steel and aluminum products led to declines in metal companies, with Century Aluminum falling over 7%, reflecting the negative impact of policy changes on the sector.
See More
US Stocks Edge Up, Led by Chipmakers' Gains
- Chipmaker Rebound: Applied Materials (AMAT) reported Q1 adjusted EPS of $2.38, surpassing the consensus of $2.21, leading to a 10% stock price increase that helped lift the broader market, indicating strong recovery potential in tech stocks.
- Inflation Data Impact: The US January CPI rose 2.4% year-over-year, below the expected 2.5%, which may prompt the Fed to continue cutting rates, with the 10-year T-note yield falling to 4.05%, providing support for the market.
- Earnings Performance: Over two-thirds of S&P 500 companies have reported earnings, with 76% exceeding expectations, and Q4 earnings growth is projected at 8.4%, demonstrating corporate resilience and restoring market confidence.
- Market Sentiment Fluctuations: Despite the overall market rise, concerns over AI persist, putting pressure on certain stocks, particularly in tech and logistics, reflecting investor caution regarding future economic prospects.
See More
Peter Schiff Questions Michael Saylor's Bitcoin Debt Refinancing Commitment
- Debt Refinancing Doubts: Peter Schiff publicly questioned Michael Saylor's credibility regarding his commitment to refinance debt if Bitcoin falls to $8,000, suggesting that such a scenario would undermine confidence in both Saylor and Bitcoin's value.
- Bitcoin Holding Losses: Saylor's company holds 714,644 Bitcoins at an average cost of $76,056, and if Bitcoin drops to $8,000, the value of these holdings would plummet to $5.7 billion, resulting in an unrealized loss of $48.6 billion against a purchase cost of $54.35 billion, highlighting significant financial risk.
- Market Technical Analysis: Bitcoin is currently bouncing from a capitulation low of $62,000-$63,000, but critical support at $80,000-$85,000 has been decisively broken, indicating severe technical damage; a drop below $62,000 could trigger panic selling.
- Gold vs. Bitcoin Performance: Schiff noted that Bitcoin is now valued at less than 13 ounces of gold, down 64% from its November 2021 peak, arguing that those who sold gold to buy Bitcoin made a significant mistake, reflecting the inherent risks associated with Bitcoin investments.
See More
Bitcoin Treasury Companies Face Challenges Amid Price Drop
- Bitcoin Holdings: As of early February, Strategy held 713,502 bitcoins valued at approximately $50 billion, showcasing its significant influence in the Bitcoin market; however, with a 45% drop in Bitcoin prices, the value of its assets is under pressure.
- Financial Losses: Strategy reported a staggering $12.4 billion loss in Q4 2025 primarily due to impairment on its Bitcoin holdings, complicating the company's operations in the current market environment.
- Stock Price Decline: The stock price of Strategy has plummeted about 60% over the past 12 months, recently hitting an 18-month low of $104, which restricts the company's ability to finance Bitcoin purchases through stock issuance.
- Investment Advice: Given the current market conditions, analysts recommend that investors buy Bitcoin directly rather than holding Strategy stock, as its market cap of $40 billion is now less than the value of its Bitcoin holdings at $50 billion.
See More
Analysis of Strategy's Bitcoin Investment Status
- Bitcoin Holdings: Strategy has accumulated 714,644 bitcoins over the past five years, valued at approximately $50 billion, but with a cost basis of $76,056 each, the current price below $70,000 puts significant pressure on its balance sheet.
- Financial Losses: In Q4 2025, Strategy reported a staggering $12.4 billion loss primarily due to impairment on its Bitcoin holdings, leading to a 60% decline in its stock price over the past 12 months, recently hitting an 18-month low of $104.
- Market Competition: With Bitcoin's price dropping 45% in the last four months, investors are now more inclined to buy Bitcoin directly rather than through treasury companies, further dimming Strategy's market outlook.
- Investment Advice: Analysts recommend viewing Strategy's stock as a sell until Bitcoin prices recover significantly, noting that it was not included in Motley Fool's list of top stocks, indicating a decline in its investment appeal.
See More
Strategic Outlook for Bitcoin Companies Dims Amid Price Decline
- Bitcoin Holdings: As of early February, Strategy holds 713,502 bitcoins valued at approximately $50 billion at current prices, showcasing its significant influence in the Bitcoin market; however, the declining price puts pressure on the value of its assets.
- Financial Losses: The company reported a staggering $12.4 billion loss for Q4 2025 primarily due to impairment on its Bitcoin holdings, leading to a 60% drop in its stock over the past year, recently hitting an 18-month low of $104.
- Market Outlook: With Bitcoin prices down 45% over the past four months, investor confidence in Strategy has waned, prompting analysts to recommend buying Bitcoin directly rather than holding Strategy stock, reflecting a pessimistic outlook on its future.
- Investment Advice: The Motley Fool analyst team did not include Strategy in their current list of top stocks to buy, indicating that until Bitcoin prices recover significantly, Strategy stock is viewed as a sell, urging investors to proceed with caution.
See More
U.S. Stocks Close Higher as Software Stocks Recover
- Market Recovery: The S&P 500 index rose by 0.05%, the Dow Jones Industrial Average by 0.10%, and the Nasdaq 100 by 0.18% on Friday, indicating a recovery after early losses, reflecting cautious optimism among investors regarding future economic prospects.
- Inflation Data Impact: The U.S. January Consumer Price Index rose by 2.4% year-over-year, below the expected 2.5%, marking the smallest increase in seven months, which may prompt the Fed to continue cutting rates, thus providing support for the stock market and alleviating concerns over rate hikes.
- Strong Software Stock Performance: Software stocks like Crowdstrike Holdings and ServiceNow rose over 4% and 3%, respectively, lifting the broader market and indicating a rebound in investor confidence in tech stocks, particularly amid rapid advancements in AI technology.
- Metal Stocks Retreat: Reports of the Trump administration's plans to narrow tariffs on steel and aluminum products led to declines in metal companies, with Century Aluminum falling over 7%, reflecting the negative impact of policy changes on the sector.
See More
US Stocks Edge Up, Led by Chipmakers' Gains
- Chipmaker Rebound: Applied Materials (AMAT) reported Q1 adjusted EPS of $2.38, surpassing the consensus of $2.21, leading to a 10% stock price increase that helped lift the broader market, indicating strong recovery potential in tech stocks.
- Inflation Data Impact: The US January CPI rose 2.4% year-over-year, below the expected 2.5%, which may prompt the Fed to continue cutting rates, with the 10-year T-note yield falling to 4.05%, providing support for the market.
- Earnings Performance: Over two-thirds of S&P 500 companies have reported earnings, with 76% exceeding expectations, and Q4 earnings growth is projected at 8.4%, demonstrating corporate resilience and restoring market confidence.
- Market Sentiment Fluctuations: Despite the overall market rise, concerns over AI persist, putting pressure on certain stocks, particularly in tech and logistics, reflecting investor caution regarding future economic prospects.
See More
Peter Schiff Questions Michael Saylor's Bitcoin Debt Refinancing Commitment
- Debt Refinancing Doubts: Peter Schiff publicly questioned Michael Saylor's credibility regarding his commitment to refinance debt if Bitcoin falls to $8,000, suggesting that such a scenario would undermine confidence in both Saylor and Bitcoin's value.
- Bitcoin Holding Losses: Saylor's company holds 714,644 Bitcoins at an average cost of $76,056, and if Bitcoin drops to $8,000, the value of these holdings would plummet to $5.7 billion, resulting in an unrealized loss of $48.6 billion against a purchase cost of $54.35 billion, highlighting significant financial risk.
- Market Technical Analysis: Bitcoin is currently bouncing from a capitulation low of $62,000-$63,000, but critical support at $80,000-$85,000 has been decisively broken, indicating severe technical damage; a drop below $62,000 could trigger panic selling.
- Gold vs. Bitcoin Performance: Schiff noted that Bitcoin is now valued at less than 13 ounces of gold, down 64% from its November 2021 peak, arguing that those who sold gold to buy Bitcoin made a significant mistake, reflecting the inherent risks associated with Bitcoin investments.
See More
