MSTR, Financial Engineering, and Why Iām Still Short
Thesis
This is a personal opinion, not investment advice.
I believe the current MSTR narrative is less about fundamentals and more about financial engineering layered on top of Bitcoin volatility. The market increasingly prices MSTR as a leveraged proxy for BTC, while ignoring that custody, liquidity, and revenue generation still ultimately sit elsewhere. Valuation arguments based on mNAV feel stretched when compared to companies that actually generate operating cash flow and custody assets directly.
History matters. Aggressive financial structures tend to work exceptionally well on the way up and fail very fast when sentiment shifts. I do not believe this structure is immune to that cycle.
Trade Plan
I expressed this view using long-dated put options rather than short stock. The goal was defined risk, time flexibility, and asymmetric payoff if downside volatility materializes. I actively manage size and duration, rolling when necessary to avoid forced decisions and to control drawdowns during counter-trend moves.
This is not a bet on an immediate crash. It is a bet that the downside risk is mispriced relative to the confidence currently embedded in the stock.
Post-Mortem (So Far)
The hardest part of this trade has not been direction, but timing. Sharp upside moves and short squeezes can temporarily overwhelm structure-based theses. That does not invalidate the view, but it does require discipline, position management, and emotional control.
If I am wrong, the loss is capped and known. If I am right, the payoff comes from patience rather than prediction.
Position Disclosure
At the time of writing, I hold long put positions on MSTR with expirations into late January. I may adjust, reduce, roll, or exit these positions at any time.
Microstrategy sits at around 175 today. This stock should be trading at 4B mkpt cap in a soon future, that represents a 90% drop from here. At Around, 17.5/share.