Stocks of MicroStrategy, which has more than 214,000 Bitcoins, fell yesterday. This decline followed a report published by hedge fund Kerrisdale Capital, better known for its short transactions.

In the report, Kerrisdale Capital announced that it is long on Bitcoin and short on MicroStrategy stocks. The hedge fund suggested that MicroStrategy stocks have increased largely due to the rising value of Bitcoin, but there is a distorted relationship here.

“Our thesis is not based on a negative opinion about Bitcoin or MicroStrategy, but on a belief that the relationship between the two is skewed,” the fund said, noting that the stock is traded at a premium of more than twice its value relative to Bitcoin.

In the report, “None of the reasons presented about MicroStrategy being attractive justify paying more than twice as much for the same coin. MicroStrategy’s trading history and simple logic show that the current inflated premium will shrink as before.”

Stating that investors can now invest directly in Bitcoin through brokerage houses, exchanges and new spot ETFs, Kerrisdale Capital argues that the premium on MicroStrategy shares is too high. The fund emphasised that although the company has greatly increased the amount of Bitcoin in the company, the amount of Bitcoin per share has remained almost unchanged in recent years.

Following this report, MicroStrategy stocks decreased in value by 14% yesterday.