Jim Chanos, a well-known short-seller, has publicly criticized Michael Saylor, Executive Chairman of Strategy Inc. (formerly MicroStrategy), for what Chanos deems “financial gibberish” regarding Saylor’s recent remarks on funding dividends through the sale of Bitcoin or its options. This critique surfaced following Saylor’s comments at the Bitcoin Treasury Unconference in New York City, where he elaborated on a “worst-case scenario” strategy involving the potential liquidation of Bitcoin assets to meet dividend obligations for the securities issued to acquire the cryptocurrency.
During a Q&A session, Saylor proposed that the company might sell calls or warrants on its Bitcoin holdings, or even sell some of its Bitcoin to cover these obligations. His comments spurred a nearly 6% increase in MicroStrategy’s stock, suggesting a complex but optimistic market response to his strategy.
Chanos took to social media platform X to express skepticism regarding Saylor’s approach, questioning the logic of selling Bitcoin to finance dividends on the very securities that were utilized to purchase it, remarking, “Who falls for this stuff?” His critique underscores the view that such financial maneuvers may be fundamentally flawed and unsustainable, especially given the volatility associated with Bitcoin.
Strategy Inc. holds a significant treasury of over 600,000 BTC, largely accumulated through various debt and equity offerings. The company’s recent acquisition of additional Bitcoin has reportedly increased its treasury to 638,985 BTC, with an aggregate purchase price nearing $47.23 billion and an average purchase price of around $73,913 per Bitcoin.
Supporters of Saylor laud his commitment to Bitcoin, positioning his company as a strong proxy for investment in the cryptocurrency. However, critics, including Chanos, express concerns about the financial risks tied to the extensive leverage of the company’s balance sheet in a highly volatile market.
Despite the tensions surrounding Saylor’s comments and strategy, the debate underscores the broader discussions regarding the sustainability of corporate strategies heavily reliant on single, volatile assets like Bitcoin.
