Not afraid of MSTR being shorted, Saylor: MicroStrategy can also issue bonds to buy stocks for reverse arbitrage.

MicroStrategy ( Strategy ) founder Michael Saylor confidently stated at the Bitcoin 2025 conference that he is not worried at all about the stock MSTR being shorted. If its mNAV falls below one, Strategy can raise funds through capital market tools such as issuing bonds and preferred stocks, and then repurchase its own stock MSTR to conduct reverse arbitrage operations.

(Bitcoin 2025｜Michael Saylor reveals the Arbitrage strategy, AI and BTC become the future Capital Market )

MSTR is a leveraged investment tool for Bitcoin

MicroStrategy, as a leveraged investment tool for Bitcoin, tends to have its stock price increase more than Bitcoin during price surges. Therefore, well-known short-seller Jim Chanos recently stated in an interview with CNBC that practices like buying Bitcoin with raised funds, such as those used by Strategy, and using "We own Bitcoin" as a reason to increase company valuation are extremely absurd. He advises investors to go long on Bitcoin while shorting MicroStrategy to engage in arbitrage.

(Famous short seller Jim Chanos: Go long on Bitcoin + short MicroStrategy for Arbitrage)

How to evaluate the relationship between MicroStrategy's stock price and Bitcoin?

If we purely use Bitcoin assets to evaluate the enterprise value of Strategy, the relationship between its stock market value and the market value of the Bitcoin it holds can be assessed using mNAV:

mNAV=Enterprise Value÷Bitcoin NAV

Enterprise Value: Market Capitalization + Total Debt ( includes Convertible Debt and Preferred Stock ).

Bitcoin NAV: Its market value of held Bitcoin

If mNAV equals one, it means that after the Strategy sells all the bitcoins, it can just pay off all debts and equity for stock investors.

mNAV fall below one is not a concern!

However, the Strategy, which is viewed as a leveraged investment tool for Bitcoin, usually sees its stock price decline when Bitcoin falls, and the extent is even greater. At the Bitcoin 2025 conference, someone asked Saylor what to do if the mNAV of the Strategy falls below 1, to which Saylor confidently responded:

"Strategy is not like a trust fund with a capital structure locked in like Grayscale. We can re-operate through methods such as stock buybacks, issuing preferred shares, or bonds. When the price is undervalued, we can instead arbitrage."

How does Saylor use Capital Market tools for Arbitrage?

The breakdown of the chain news operation methods mentioned by Saylor is as follows (: the red marked area in the image below ):

mNAV<1

Issuing convertible bonds or preferred shares ( in his eyes, preferred shares are also considered a type of bond )

Use the funds raised to repurchase MSTR common stock.

MSTR stock price rises

mNAV>1

Once mNAV > 1, short sellers like Jim Chanos will also enter to buy Bitcoin and short MSTR for arbitrage, as indicated by the blue marks in the image below (. However, during a Bitcoin bull market, mNAV may only be adjusted downward, but it is difficult for it to really drop below 1.

Strategy was once insolvent during the bear market.

In fact, according to the data from the Strategy Tracker, the NAV Premium of the Strategy ) is similar to mNAV, but does not include convertible bonds and preferred stocks. ( has fallen below 1 several times between the end of 2021 and mid-2023. At that time, Bitcoin hovered between 20,000 and 40,000, and MicroStrategy also showed a situation of being insolvent due to high expense charges related to Bitcoin, where total assets were less than total liabilities, resulting in negative shareholders' equity ).

This article is not afraid of MSTR being shorted. Saylor: MicroStrategy can also issue bonds to buy stocks for reverse arbitrage. First appeared in Chain News ABMedia.