Famed short seller Jim Chanos has closed his high-profile trade that involved shorting shares of Strategy while going long on bitcoin. The decision was announced through a post on social media platform X, marking a significant shift in his trading stance.
Chanos stated that he unwound his pair trade as of the market’s opening last Friday, citing a notable change in the valuation dynamics that originally made the bet appealing. Strategy, formerly known as MicroStrategy until a recent rebranding, experienced a severe stock decline, plummeting nearly 50% from its peak in 2025. This drastic drop significantly diminished the premium that investors had previously been willing to pay for the company’s substantial bitcoin holdings.
Over recent years, Strategy has invested billions of dollars in bitcoin, positioning itself as the largest corporate holder of the cryptocurrency. Utilizing leverage to build its bitcoin inventory, the company had enjoyed a robust valuation compared to its assets.
Chanos referenced the market-implied net asset value (mNAV) of Strategy, a critical metric used to compare a company’s market value against the value of its owned assets—primarily, bitcoin. When he initially advocated for the trade at his Bears In Hibernation Conference in December 2024, Strategy’s mNAV stood around 2.5 times, suggesting that investors were paying approximately $2.50 for every $1 of bitcoin held by the company.
However, in the interim, while bitcoin’s price has remained relatively stable near record highs, Strategy’s stock has taken a downward trajectory. This shift has led to a compression of the excess value embedded in Strategy’s shares. As a result, the mNAV multiple has narrowed to approximately 1.2 times, reflecting this significant decline.
Chanos communicated that while he still believes there could be further mNAV compression, the underlying thesis of his trade has largely materialized. He noted that it is wise to exit, especially with mNAV falling below 1.25, down from around 2.0 just months prior. According to analysts at Chanos & Co., the premium associated with Strategy is expected to continue compressing over time as the company issues additional common equity. They advised that it would be prudent to allow other investors to pursue the final phases of this trade as Strategy heads towards an mNAV around 1.0.
Jim Chanos, who gained prominence for shorting Enron prior to its infamous collapse in 2001, transitioned his hedge fund into a family office and advisory business at the end of 2023, marking a new chapter in his investment career.
