Veteran fund manager dumps Microstrategy stock over broken word
Strategy Inc. (formerly known as MicroStrategy) isn't just a tech company anymore — it's a massive bet on Bitcoin. And it's one of the loudest on Wall Street.
Led by co-founder and executive chairman Michael Saylor, Strategy holds over 629,000 Bitcoin worth more than $71 billion as of Aug. 19 afternoon.
With a market cap hovering around $96 billion, the company has become a proxy for Bitcoin exposure, especially after converting itself into what some call a 'Bitcoin leverage ETF in disguise.'
But not everyone is sold on the Strategy.
On Aug. 19, veteran hedge fund manager and former MicroStrategy investor Josh Mandell announced his complete exit from the stock — and didn't mince his words.
Josh Mandell dumps Strategy stock
Mandell, who previously held shares in Strategy and disclosed a $2.1 million position in Bitwise's Bitcoin ETF (BITB), revealed he had liquidated his MSTR holdings after what he described as a breach of trust by Saylor.
'I actually bought above here, and then Saylor sold,' Mandell wrote on X. 'He said they wouldn't ... and then he did.'
At the heart of Mandell's frustration is the issue of valuation multiples and shareholder promises.According to Mandell, Saylor had assured investors during a live results announcement that the company would not issue new shares unless the stock was trading at or above 2.5x its modified net asset value (mNAV), which measures the value of Strategy's Bitcoin holdings versus its market cap.
MSTR's mNAV currently stands at 1.55, down 3.73% in the last 24 hours.
Mandell says he relied on that verbal agreement when entering the stock. When the company broke from that guidance and issued stock below the 2.5x threshold, he felt misled.
'A man is only as good as his word,' Mandell wrote. 'I will not speak in support of anything that man does again.'
Mandell is a veteran hedge fund manager and well-known figure in the traditional finance world, with a background in short-term options trading and fixed-income investments like government bonds.
Over the years, he built a reputation as a sharp market tactician with a particular focus on risk-adjusted returns.
Josh Mandell slams Saylor's preferred stock play
In his post, Mandell took aim at Strategy's recent financing structure. He mocked Saylor's explanation that if the stock dropped too low, the company could pivot to buying back shares instead of issuing preferred stock.
'Preferred shares need money from selling stocks to pay dividends,' Mandell added, suggesting the company is using equity issuance in a way that could harm long-term shareholders.
To Mandell, the entire approach undermines investor confidence and exposes a lack of discipline in managing shareholder capital.
His critique echoes broader concerns from other investors about Strategy's aggressive capital structure — which includes $8.2 billion in debt and $6.3 billion in preferred stock — and its ability to support such leverage if Bitcoin prices weaken further.
Strategy's stock sinks as investor confidence wobbles
Shares of MSTR were down 6.93% at $338.38 as of 3:36 p.m. ET, marking one of the biggest single-day drops for the stock in recent weeks. Trading volume was above average, clocking over $4.5 billion on the day.
Despite a 150% gain over the past year, MSTR has declined 18% over the past three months, reflecting growing volatility around the company's Bitcoin-heavy balance sheet.
The stock remains far below its 2021 highs, when Bitcoin euphoria pushed it well above $1,000 per share.
Meanwhile, Bitcoin itself is trading at $113,591, down about 2.36% in the past 24 hours.
Veteran fund manager dumps Microstrategy stock over broken word first appeared on TheStreet on Aug 19, 2025
This story was originally reported by TheStreet on Aug 19, 2025, where it first appeared.
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