How does Michael Saylor feel about bitcoin? We’ll let him tell you in his own words.
“Bitcoin is a swarm of cyberhornets serving the goddess of wisdom, feeding on the fire of truth, exponentially growing ever smarter, faster, and stronger behind a wall of encrypted energy,” the executive chairman and co-founder of MicroStrategy (MSTR) once said.
Too subtle? Still not sure how the former CEO of the software intelligence company feels about the world’s largest cryptocurrency?
Maybe this will help.
“Bitcoin is a bank in cyberspace, run by incorruptible software, offering a global, affordable, simple and secure savings account to billions of people that don’t have the option or desire to run their own hedge fund,” Saylor said.
Okay, so the guy really likes bitcoin. And on March 19, the first day of spring, MicroStrategy took a bigger bite out of bitcoin when the company said it had bought 9,245 bitcoins for $623 million between March 11 and March 18.
MicroStrategy said it a completed a $603.75 million convertible debt offering — its second in a week — to raise money to buy bitcoin.
The company now holds about $13.5 billion of bitcoin, which adds up to more than 1% of the 21 million bitcoin that will ever exist, according to CoinDesk.
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Committed to developing bitcoin network
MicroStrategy said in a regulatory filing that it had paid roughly $7.53 billion for its bitcoin stash, an average of $35,160 per coin.
The company’s stock fell on Tuesday, while bitcoin posted its biggest single-day loss since November 2022. MicroStrategy was off slightly to $1,416 at last check on Wednesday and bitcoin was up 2.3% to $63.607.
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Phong Le, MicroStrategy’s president and CEO, told analysts during the company’s Feb. 6 fourth-quarter-earnings call that “we remain highly committed to our bitcoin strategy with a long-term focus..”
“We consider MicroStrategy to be the world’s first bitcoin development company,” he said. “We are a publicly traded operating company committed to the continued development of the bitcoin network through activities in the financial markets, advocacy, and technology innovation.”
MicroStrategy earned $4.96 a share in the quarter, beating the FactSet consensus of a loss of 64 cents, and light years beyond the year-ago loss of $21.93 a share.
Revenue totaled $124.5 million, compared with FactSet’s call for $133 million and the year-earlier tally of $132.6 million.
During the call, Saylor told analysts that “2024 is the year of birth of bitcoin as an institutional-grade asset class.”
MicroStrategy, he said, completed the first 15 years of the bitcoin life cycle, back when it was largely unregulated and misunderstood.
“The next 15 years, I would expect, will be a regulated, institutional, high-growth period of bitcoin, very, very different in many ways from the last 15 years,” Saylor said.
Crypto’s dark days
“Bitcoin itself is performing well for a number of reasons, but one reason is because it represents the digital transformation of capital,” he added.
Of course, life with bitcoin wasn’t always sunshine and roses.
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We take you back now to those less-than-thrilling days yesteryear, when covid-19 was on the rampage and the price of bitcoin fell 30% from March 8 to March 12 2020.
By the end of 2021, bitcoin had fallen nearly 30%. And 2023 saw the cryptocurrency sector wracked with bankruptcy and scandal, with the likes of FTX CEO Sam Bankman-Fried being convicted of fraud, conspiracy, and money laundering.
SBF, as he has been known, is scheduled to be sentenced in Manhattan federal court on March 28. He faces a long stretch.
But bitcoin rose about 160% in 2023 and hit a record $73,750 on March 14.
Saylor recently said that his high hopes for bitcoin this year stemmed largely from the U.S. Securities and Exchange Commission approving spot bitcoin ETFs and the upcoming bitcoin halving, where when bitcoin’s mining reward is split in half.
MicroStrategy is the first bitcoin development company, Saylor told analysts, but perhaps not for long.
“We’ve published our playbook, and we’re showing other companies how to do it,” he said.
TD Cowen analyst Lance Vitanza cited MicroStrategy’s latest bitcoin acquisition when he adjusted his price target for the company’s shares on March 20.
The analyst cut the investment firm’s price target on MicroStrategy to $1,450 from $1,560 and affirmed an outperform rating on the shares.
He says the shares remain an attractive vehicle for investors looking to gain bitcoin exposure.
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