Michael Saylor’s Bitcoin Strategy for MS

MicroStrategy founder tells board that the first cryptocurrency could increase Microsoft's market cap by $4.9 trillion

The founder of MicroStrategy, Michael Saylor, presented a strategy to buy Bitcoin to Microsoft's CEO, Satya Nadella, and the company's board of directors. According to Saylor's calculations, the use of the first cryptocurrency could increase Microsoft's market capitalisation by trillions of dollars over the next ten years.

The software development company MicroStrategy is the largest corporate holder of Bitcoin in the world. About four years ago, the company adopted a strategy of accumulating Bitcoin, financing the purchase of cryptocurrency by selling shares and issuing bonds. As of 2 December, MicroStrategy's Bitcoin assets are valued at $36.7 billion.

During a three-minute presentation, Saylor called Bitcoin "a new wave of technology" that, in his view, Microsoft "cannot afford to lose." He said it would make more sense for the company to buy and hold Bitcoin than to buy back its own shares or invest in bonds.

According to Saylor, Microsoft (MSFT) could increase its share price by at least $155 by 2034 and by $584 in the most positive scenario. In this case, Microsoft's capitalisation would grow, according to Saylor's most conservative estimates, by $1 trillion to a maximum of $4.9 trillion. To achieve this, the company would have to convert cash flows, dividends, share buybacks, and bonds into Bitcoin.

At market close on 30 November, the share price MSFT was $423.46. Currently, the company's capitalisation stands at $3.1 trillion.

Michael Saylor Reveals Microsoft's Bitcoin Strategy to Top Management

Saylor posted a presentation for Microsoft on its website. A few hours before its release, he hinted at a new purchase of Bitcoin by MicroStrategy. As of 24 November, MicroStrategy owned 386,700 BTC with an average purchase price of $56,761 per bitcoin, for a total of $21.9 billion.

On 9 December, Microsoft shareholders will vote on whether to consider investing in Bitcoin at their annual meeting. However, Microsoft's board of directors has already recommended that shareholders vote against the proposal, noting in the voting document that company management is already "carefully considering the issue."

Microsoft founder Bill Gates has repeatedly criticised cryptocurrencies, particularly Bitcoin. In 2021, the billionaire stated that Bitcoin mining consumes an excessive amount of electricity, thus harming the environment. Gates has also stated that he has no plans to invest in Bitcoin, preferring instead to allocate capital to companies that produce tangible assets. He stepped down from Microsoft's board in 2020.