Here’s Why Bireme Capital Went Short in MicroStrategy Incorporated (MSTR)

Investment management company Bireme Capital recently released its second quarter 2022 investor letter. A copy of the same can be downloaded here. The fund outperformed during the quarter and returned -1.4% net of fees compared to 16.1% for the S&P 500 Index. The outperformance was primarily due to gains made on the fund’s short positions, which contributed 16.9% to the portfolio. You can check the top 5 holdings of the fund to know its best picks in 2022.

Bireme Capital discussed stocks like MicroStrategy Incorporated (NASDAQ:MSTR) in the second quarter investor letter. Headquartered in Tysons Corner, Virginia, MicroStrategy Incorporated (NASDAQ:MSTR) is an American enterprise analytics software and services provider. On August 22, 2022, MicroStrategy Incorporated (NASDAQ:MSTR) stock closed at $268.09 per share. One-month return of MicroStrategy Incorporated (NASDAQ:MSTR) rose to 12.81% and its shares lost 62.53% of their value over the last 52 weeks. MicroStrategy Incorporated (NASDAQ:MSTR) has a market capitalization of $3.198 billion.

Here is what Bireme Capital specifically said about MicroStrategy Incorporated (NASDAQ:MSTR):

“We also remain short MicroStrategy, a middling business analytics software company that turned itself into a gigantic levered bet on Bitcoin at the height of the hype cycle – losing over a billion dollars in the process. Now, the company will need all the cash flow from the business just to pay off the interest payments on the enormous debt load, leaving no earnings for equity holders. Despite shares down over 60% for the year, the company continues to trade at a material premium to the value of its assets. For more detail on our thesis, please see our blog post here, as well as the Forbes and Fortune write-ups that feature our short position.”

MicroStrategy Incorporated (NASDAQ:MSTR) is not on the list of 30 Most Popular Stocks Among Hedge Funds. As per our database, MicroStrategy Incorporated (NASDAQ:MSTR) was held by 18 hedge fund portfolios at the end of the first quarter, which was 14 in the previous quarter.

We discussed MicroStrategy Incorporated (NASDAQ:MSTR) in another article and shared the list of crypto stocks for 2022. You can check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other prominent investors.

Disclosure: None. This article is originally published at Insider Monkey.