Legendary Short Seller Jim Chanos Just Closed His MSTR Trade—And Here's Why That Matters

Veteran abbreviated seller Jim Chanos disclosed connected Nov. 8 that his steadfast exited its hedged commercialized connected Strategy (NASDAQ:MSTR), unwinding a presumption that had been intimately watched by cryptocurrency and equity marketplace participants.

The disclosure came via X aft what Chanos described arsenic "some inquiries" astir the presumption of the trade. Chanos & Co closed retired their presumption connected Nov. 6, ending a strategical stake that centered connected the narration betwixt Strategy's banal terms and its important Bitcoin holdings.

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Chanos's attack to Strategy was nuanced — not a elemental abbreviated position, but a hedged trade. According to probe notes circulated by Chanos & Co. earlier this year, the steadfast had been shorting Strategy shares portion simultaneously holding a agelong presumption successful Bitcoin, aiming to capitalize connected what it viewed arsenic an inflated premium betwixt the company's marketplace worth and its cryptocurrency assets.

At the clip the commercialized was archetypal recommended successful December, Strategy’s market-to-net-asset-value ratio stood astatine astir 2.50x. That premium has since compressed significantly. As of Nov. 21 closing prices, MSTR is trading astir $170, down astir 63% from its 2025 peak, with the mNAV ratio present astatine 1.22x.

The thesis down the presumption was straightforward: Strategy’s shares were trading astatine a important premium to the worth of its Bitcoin holdings and operational business. Chanos & Co believed this spread would constrictive implicit clip arsenic the institution continued to contented communal equity, diluting the premium that investors had been consenting to wage for vulnerability to Bitcoin done a publically traded vehicle.

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Chanos & Co noted successful their proposal that portion they inactive believed determination was country for further mNAV compression, the commercialized had “largely played out.” The implied premium—calculated arsenic Strategy’s endeavor worth minus its Bitcoin holding value—had fallen from a highest of $80 cardinal successful November 2024 and a much caller highest of $70 cardinal successful July to astir $15 billion.

"While we inactive judge determination is much country for mNAV compression, the thesis has mostly played out." That's however Chanos & Co framed its updated presumption connected Strategy, arguing that the stock's once-outsized premium should support narrowing arsenic the institution continues issuing communal equity.