On August 24, a caller asked Jim Cramer for his thoughts on maximizing risk at the Bitcoin power law floor by starting a position in Strategy Inc (NASDAQ:MSTR) stock. Mad Money host replied:
Well, first, I’m not in favor of MSTR… Because frankly, they have too much debt. But I will talk about something that did happen. I bumped into one of the Winklevoss twins recently… and they were telling me, well, Cameron, he was saying point blank, “Listen, there’s going to be some good news in crypto, I think. You gotta hold on to it.” And what I said to him was, “You know what? I had second thoughts after I heard what the IBM CEO said.” And said, “You know what, I think it’s going to be longer.” And if it’s going to be longer, I’m going to risk owning it. I did not say that on air. I should have. I should have said, I changed my mind. Why did I change my mind? Because I think that quantum is happening way too late and I’m much less worried than I used to be. I think it’s just too far in the distance and I will adjust and so will Bitcoin.
Strategy’s Financing Adds to the Bear Case
Strategy Inc’s (NASDAQ:MSTR) debt and preferred securities remain the most direct concern for common shareholders. Its Bitcoin strategy is funded through a combination of common equity, preferred securities, convertible debt and other financing arrangements. That structure gives common shareholders leveraged exposure to Bitcoin while leaving Strategy with debt, preferred-stock obligations and ongoing financing needs. As of August 23, the company held 840,447 bitcoin. The company also reported roughly $6.75 billion of debt and approximately $15 billion of preferred stock, with approximately $1.76 billion in expected annual preferred dividend payments and interest expense.
Dilution is another risk. Between August 17 and August 23, the company sold 18.26 million MSTR shares and raised approximately $2.01 billion in net proceeds. During the period, Strategy repurchased about $136.4 million of preferred stock, added $300 million to its existing USD Reserve and established a new $1.59 billion USD Cash pool. The larger liquidity cushion reduces near-term funding pressure, but it does not eliminate the debt, preferred obligations, or dilution risks that concern Cramer.
The other major risk is mNAV, a measure of Strategy Inc’s (NASDAQ:MSTR) market price relative to its net Bitcoin per share after accounting for senior claims and the company’s USD Reserve. The company’s capital-raising model is generally more favorable when MSTR trades at a meaningful premium to the value of its Bitcoin because issuing equity at a higher valuation can provide capital for additional Bitcoin purchases without the same pressure on Bitcoin per share. If that premium contracts, the economics of issuing new shares become less favorable.
The bear case does not require Bitcoin to collapse. If Bitcoin fails to appreciate quickly enough to offset debt and preferred obligations, while continued share issuance dilutes existing holders and MSTR’s valuation premium contracts, common shareholders could receive weaker returns than they would from owning Bitcoin directly.
Hedge Fund Interest and Short Interest
Insider Monkey’s tracking of more than 1,000 hedge funds shows that 37 hedge funds held MSTR in the second quarter of 2026, up from 32 in the first quarter. Additionally, short interest provides a measure of market caution. Short interest stands at roughly 8.92% of the float. It shows measured caution toward Strategy Inc’s (NASDAQ:MSTR) risk profile, given the stock’s sensitivity to Bitcoin and its capital structure. It should not, however, be interpreted simply as evidence of aggressive speculative positioning against the stock.
Cramer is effectively separating the Bitcoin thesis from Strategy Inc’s (NASDAQ:MSTR) thesis. For investors, the question is whether the company can turn higher Bitcoin prices into sufficient value for common shareholders after accounting for its financing costs, dilution, and the premium investors are willing to pay for MSTR. Cramer appears willing to take the Bitcoin risk while remaining unwilling to take those company-specific risks.
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