Investment firm Kerrisdale Capital is taking a short position on MicroStrategy stock, claiming that it is trading at an unjustifiable premium compared to Bitcoin. Sahm Adrangi, Chief Investment Officer at Kerrisdale Capital, explained that MicroStrategy’s business model can be summed up in six words: “They own X amount of Bitcoin.” However, Adrangi believes that this alone does not justify the stock’s price, as it indicates a Bitcoin price that is two and a half times higher than reality. He argues that MicroStrategy’s software business is not worth much and that the company’s enterprise value does not increase with more Bitcoin purchases. MicroStrategy, under the leadership of Michael Saylor, has been buying significant amounts of Bitcoin and currently holds 1% of all Bitcoin. Kerrisdale Capital, known for publishing research and shorting stock, has also targeted Bitcoin mining firms. Adrangi acknowledges that shorting can take multiple years to yield results. While the crypto community strongly defends MicroStrategy and Bitcoin, there are critics who question the logic behind Kerrisdale’s short position. Adrangi clarified that he does not view Bitcoin as a wise investment, calling it a “get-rich-quick scheme.” MicroStrategy did not respond to requests for comment.
What is the reason behind traders betting against MicroStrategy led by Michael Saylor