The Wall Street Journal: He Just Hit a Jackpot of Billions Betting on Bitcoin
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The Wall Street Journal: He Just Hit a Jackpot of Billions Betting on Bitcoin
Michael Saylor bets on Bitcoin, while some institutions choose to bet on MicroStrategy stock.
Navigating Web3 tides with focused insightsBy Gregory Zuckerman
Translated by Luffy, Foresight News
Michael Saylor, CEO of MicroStrategy
Michael Saylor's company hasn't launched any popular products or services. What he and MicroStrategy have done is issue new shares and bonds at a pace rarely seen in corporate history, then pour all the proceeds into bitcoin—and vow to keep doing it.
Over the past year, MicroStrategy’s stock has surged about 690%. The 59-year-old executive chairman holds roughly 10% of the company, worth around $9.7 billion, plus personally owns about $1.9 billion in bitcoin.
Saylor has become a public face of the recent bitcoin boom, with nearly 4 million followers on X (formerly Twitter). To celebrate bitcoin surpassing $100,000, Saylor hosted a New Year’s Eve party at his oceanfront mansion in Miami, inviting hundreds from the crypto community, with his luxury yacht docked nearby. Six dancers in gold costumes performed at the event. Prominent figures and top investors mingled, including former Legg Mason fund manager Bill Miller, Fortress Investment Group co-CIO Peter Briger, and Capital Group portfolio manager Mark Casey. The event was livestreamed on YouTube to tens of thousands of bitcoin enthusiasts, with Saylor hosting in a black blazer and a bitcoin-themed T-shirt.
Enthusiasm for Saylor’s company has reached such heights that a puzzling situation has emerged: MicroStrategy holds about $47 billion in bitcoin, yet its market capitalization stands at $97 billion. It’s as if investors are paying $2 for a $1 bill. Even more surprising: experienced investors are among the biggest buyers, including powerhouse mutual fund firm Capital Group, which held about 8% of MicroStrategy as of September 30, and Norges Bank Investment Management—the Norwegian sovereign wealth fund managing $1.5 trillion—holding nearly 1% of the company.
Fans argue this premium reflects confidence in Saylor’s ability to keep generating returns through his bitcoin bets. They believe bitcoin’s capped supply of 21 million coins creates scarcity that will drive up value. Richard Byworth, partner at SYZ Capital who owns MicroStrategy stock personally, says Saylor creates shareholder value by issuing shares at high prices and selling bonds to the company on favorable terms, expanding MicroStrategy’s bitcoin holdings in the process.
“The premium is justified and will persist,” said Jordi Visser, a Wall Street veteran formerly at Morgan Stanley who recently bought MicroStrategy shares. “No other company is doing what he’s doing. They own about 2% of the entire bitcoin supply—what other company owns more?”
Yet Saylor’s strategy carries enormous risks. He has ridden investment waves before, only to see them peak and collapse—sometimes losing billions in personal wealth in a single day.
Saylor declined to comment for this article.
Unmarried and turning 60 next month, Saylor has faced setbacks throughout his career and clashed with financial regulators. Last year, he agreed to pay Washington, D.C. $40 million to settle a dispute over income taxes, after local officials claimed he effectively lived in the district rather than Florida or Virginia, making him liable for city taxes.
Saylor’s father was a career Air Force officer. Saylor studied aeronautics and astronautics at MIT and participated in the Air Force Reserve Officer Training Corps. A few years after graduation, in 1989, he co-founded MicroStrategy with a college friend in Tysons Corner, Virginia, initially as a data-mining software firm.
During the late 1990s internet boom, MicroStrategy rose rapidly. At one point, Saylor’s stake was worth about $10 billion—enough to throw lavish parties for employees and others, and even charter Caribbean cruises. MicroStrategy also acquired domains like Mike.com, Michael.com, Hope.com, and Voice.com, later selling Voice.com for $30 million.
But when the dot-com bubble burst in 2000, everything collapsed. As regulators scrutinized revenue recognition practices across the industry, MicroStrategy was forced to restate its earnings. The downfall was so dramatic it made tabloid headlines: In March that year, the *New York Daily News* ran a story titled “Lost $6 Billion in a Day,” featuring a photo of the then-35-year-old Saylor, clean-shaven and suited, wearing a dazed expression.
Saylor has long been a public figure in bitcoin; the above shows him speaking at a conference in 2023
Late that same year, Saylor, two other executives, and the company paid $11 million to settle accounting fraud charges brought by the Securities and Exchange Commission (SEC) related to the restatement. The SEC alleged the company had inflated revenues and profits, showing gains instead of losses, though Saylor and others neither admitted nor denied the allegations.
In July 2002, MicroStrategy’s stock closed at 45 cents, a steep drop from its 2000 high of $313, and the company faced serious debt issues.
Over lunch at Rick Rickertsen’s Hamptons villa in New York, the venture capitalist expressed sympathy and asked Saylor if he feared losing control of his company.
“Possibly,” Saylor replied. “But I’ll start over.”
Saylor restructured MicroStrategy’s debt and executed a 10-to-1 reverse stock split, pulling the company back from the brink. Over the years, he searched for the next big opportunity. For a time, he earned substantial personal gains investing in stocks like Google and Apple, but dismissed bitcoin—tweeting in 2013 that it was “on its last legs.”
By 2020, MicroStrategy’s stock had barely moved for years, with dim growth prospects. The company had a market cap of just $1.5 billion, though it remained profitable and held about $500 million in cash.
During the pandemic in 2020, Saylor pondered what to do with the company’s cash while staying at his Miami home. Worried that massive government spending to prop up economies could trigger inflation, he revisited bitcoin and became a staunch believer. Soon, he proposed to the board that they use the cash to buy bitcoin. The board agreed, largely because better alternatives seemed scarce. At minimum, they thought, the move might attract some positive attention.
“The company was going nowhere, with almost no Wall Street coverage,” said Rickertsen, who later joined the board. “Prospects were bleak.”
That year, Saylor used half the company’s cash—about $250 million—to buy bitcoin at roughly $11,000 per coin. He also invested over $100 million of his own money. But bitcoin soon dropped to $9,000, leaving MicroStrategy with an unrealized loss of about $40 million.
“Most of our board members said, ‘Oh my God, what have we done? We’re going to get sued,’” Rickertsen recalled. “Saylor was worried too.”
The panic didn’t last long. Bitcoin began rising, breaking $26,000 by the end of 2020. MicroStrategy borrowed billions to buy more bitcoin, including a $205 million floating-rate note at 8.27% interest—a tough rate at the time.
Then, at the end of 2022, cryptocurrency exchange FTX collapsed, sending bitcoin below $17,000 and MicroStrategy’s stock down to about $17. The company’s average purchase price for bitcoin was around $30,000, resulting in paper losses. Rumors spread that the company was in trouble. But Saylor and the company doubled down.
As Saylor intensified his strategy of issuing stock and debt to buy bitcoin, and as bitcoin prices kept climbing, the company’s share price took off. According to Mark Palmer, an analyst at benchmark Company, MicroStrategy raised $23.2 billion through stock and bond sales in 2024 alone.
Saylor’s messaging may sound repetitive and simplistic, but his conviction in bitcoin remains unshakable. He emphasizes bitcoin’s limited supply—a feature he says sets it apart from the U.S. dollar and even gold. This scarcity, he argues, makes bitcoin far more effective as a hedge against inflation. He also highlights bitcoin’s digital nature, saying it allows holders to store and use money more easily and cheaply, without intermediaries, making it a “revolutionary” form of currency.
Some mutual funds and institutions have internal rules prohibiting direct investments in bitcoin or bitcoin ETFs, making MicroStrategy stock an indirect way to gain exposure. Even conservative large investors have viewed the stock as a potential edge over peers reluctant to enter the crypto space.
Saylor has proven adept at creating various equity and debt instruments—bank loans, convertible bonds, common stock, and more—to ensure a steady inflow of capital.
“His genius lies in creating different products for different audiences,” said Brett Messing, an executive at SkyBridge Capital, whose funds heavily invest in bitcoin and advise a fund holding MicroStrategy stock.
Over the past month, Saylor has aggressively promoted both MicroStrategy and bitcoin across TV appearances, major podcasts, industry conferences, and other platforms. “If you’re not buying bitcoin at these highs, you’re missing the opportunity to make money,” he recently tweeted.
“He speaks boldly in public but is more nuanced in private,” said Matt Hougan, chief investment officer at crypto asset manager Bitwise, whose firm runs an ETF holding MicroStrategy stock. Last summer, he attended a dinner with 12 investors where Saylor gave a presentation.
If bitcoin continues to rise, the premium on MicroStrategy stock could persist. But if bitcoin crashes, MicroStrategy’s shares would likely fall sharply too. Even if the premium disappears, the stock could still suffer if bitcoin merely stagnates. Skeptics note that similar investment vehicles, such as closed-end funds, often trade at discounts to their net asset values—not premiums.
Still, the company may not face an existential threat. MicroStrategy currently has $7.26 billion in unsecured debt, much of it issued at very low rates. It holds 450,000 bitcoins, with an average cost of about $62,000 each. Only if bitcoin falls below $16,000 and stays there near maturity would the value of its bitcoin holdings dip below its debt obligations.
Just over a week ago, Saylor unveiled a novel method for MicroStrategy to raise funds from investors to support further bitcoin purchases. He announced the company plans to sell $2 billion in “perpetual preferred shares” this quarter. That news prompted analyst Palmer to reaffirm his $650 price target on MicroStrategy stock—about 65% above current levels.
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