Michael Saylor, the chairman of MicroStrategy, addressed attendees at the Bitcoin 2024 conference held in Nashville, Tennessee, on July 26, 2024. This annual event, organized by BTC Media LLC, caters to enthusiasts of the original cryptocurrency. During the conference, Saylor’s company made headlines with its latest earnings report, signaling a strategic pivot in its approach to bitcoin.
MicroStrategy, known for its aggressive accumulation of bitcoin, is now shifting from a “never sell” policy to a more active management strategy aimed at maximizing bitcoin value per share. This change comes in light of a staggering net loss of $12.5 billion reported in the first quarter, attributed primarily to a significant drop in bitcoin prices earlier this year.
The company’s president and CEO, Phong Le, elaborated during an earnings call that while the firm traditionally refrained from selling its bitcoin holdings, it is now open to the possibility of selling its bitcoin as a means to obtain U.S. dollars or to pay down debt if doing so increases the value of bitcoin per share. “Our ability to sell bitcoin… is something that we would consider doing going forward,” Le stated.
In December, MicroStrategy established a U.S. dollar reserve, currently valued at $2.25 billion, ensuring it can meet obligations such as preferred stock dividends and interest payments on its debt. To fund its bitcoin purchases, the company has been issuing new equity and debt instruments.
Moving forward, Le emphasized a commitment to being net aggregators of bitcoin, advocating for strategies that enhance the bitcoin ownership per share, which they believe will yield long-term benefits for shareholders. However, following the announcement, MicroStrategy’s shares fell by 3% in after-hours trading.
The concept of “bitcoin per share” serves as an informal metric for assessing the amount of bitcoin represented by each share of the company. Variations in this metric can occur based on acquiring more bitcoin, issuing additional shares, or selling bitcoin to manage financial responsibilities.
Saylor paralleled MicroStrategy’s updated approach to that of a real estate development business, arguing that savvy asset management—such as selling high-value land to reduce debt or to fund further acquisitions—is a recognized practice in real estate that should not be viewed negatively. “We’re like a bitcoin development company,” Saylor declared, reinforcing the new strategy as a means to enhance value.
As of the end of the first quarter, MicroStrategy holds 818,334 BTC, having invested approximately $61.81 billion at an average cost of around $75,500 per coin. This amount represents nearly 4% of the total bitcoin supply. The firm reported acquiring about 63,000 BTC year-to-date, with an impressive bitcoin yield of roughly 9%, indicating effective growth in bitcoin per share relative to its overall capitalization.
Through these initiatives, MicroStrategy is positioning itself not only as a major player in the bitcoin market but also as a company seeking sustainable and strategic growth, adapting its methods in response to market conditions and financial goals.
