What is the reason behind traders betting against Michael Saylors MicroStrategy

Investment firm Kerrisdale Capital is taking a short position on MicroStrategy stock, claiming that it is trading at an unjustifiable premium compared to Bitcoin. According to Sahm Adrangi, the chief investment officer at Kerrisdale Capital, MicroStrategy’s business model can be summarized in six words: “They own X amount of Bitcoin.” However, Adrangi believes that this alone does not justify the stock’s price. According to a March report, MicroStrategy’s stock indicates a Bitcoin price that is 2.5 times higher than the actual value. Adrangi argues that the software business itself is not worth much and that the company’s enterprise value does not increase with the purchase of more Bitcoin. MicroStrategy has been buying Bitcoin since 2020 under the leadership of Michael Saylor, its executive chairman and co-founder. This strategy has led the company to hold a significant amount of Bitcoin, with a total value of $14.6 billion. Kerrisdale Capital, known for shorting stocks and publishing research, has now turned its attention to cryptocurrency, shorting mining firm Riot in addition to MicroStrategy. Despite facing criticism from the crypto community, Kerrisdale remains confident in its research and conclusions. Adrangi acknowledges that shorting may take multiple years to yield results. While some argue that MicroStrategy’s stock is overvalued, others believe it could still rise further. Adrangi and Kerrisdale have adopted a “go short MicroStrategy, go long Bitcoin” approach, but Adrangi himself does not see Bitcoin as a wise investment. He views it as a get-rich-quick scheme and believes that the energy usage involved is not justified.