MicroStrategy rides ‘red sweep’ to 477% rise in 2024, top tech stock

On the threshold of Micro strategy‘s stock market debut in June 1998, founder Michael Saylor was living in a penthouse suite at the Lotte New York Palace in Midtown Manhattan. Saylor, who was 33 at the time, says it was the most exquisite hotel room he had ever seen, paid for by underwriter Merrill Lynch.

The next morning, Saylor went to the floor of the Nasdaq to watch his company’s stock open. He recalled seeing a note roll across the ticker, warning traders: “Please do not confuse MSTR with MSFT.” The latter belonged Microsoftthe software giant that had gone public 13 years earlier.

MicroStrategy shares surged 76% in their debut, joining the parade of technology companies benefiting from the dot-com boom.

“It was a good day,” Saylor told CNBC.

More than 26 years later, MicroStrategy and Microsoft were linked again, but for a completely different reason. In December 2024, Saylor stood before Microsoft shareholders to try to convince them that the company, now valued at over $3 trillion, should put some of its $78.4 billion in cash, cash equivalents and short-term investments into bitcoin.

“Microsoft cannot afford to miss the next wave of technology, and bitcoin is that wave,” Saylor said in a video presentation that he published on X last week. The post has more than 3.6 million views.

Saylor has gone all in on that strategy. MicroStrategy has bought 439,000 bitcoin since mid-2020, a stockpile now worth about $42 billion and underpinning the company’s market capitalization explosion to $82 billion from about $1.1 billion when the plan was put in place.

MicroStrategy’s software unit, which specializes in business intelligence, generates just over $100 million in revenue each quarter. After zooming up in 1998 and 1999, the stock crumbled in the dot-com bust, losing almost all of its value. In the decades that followed, it slowly rebounded before skyrocketing due to bitcoin.

Four years into their bitcoin acquisition, the MicroStrategy of the world fourth largest holderbehind only the creator Satoshi Nakamoto, BlackRock’s iShares Bitcoin Trust and the crypto exchange Binance.

At Microsoft, the shareholder vote backed by Saylor failed by a wide margin – less than 1% of its investors voted for it.

But the performance gave Saylor, now 59, another opportunity to preach the gospel of bitcoin and highlight the benefits of converting as much cash as possible into the only digital asset. It’s a story that Wall Street has been gossiping about.

MicroStrategy shares are up 477% this year at Friday’s close, second AppLovin among all U.S. technology companies valued at $5 billion or more, according to FactSet data. That follows a 346% increase in 2023.

While the rally was in full force well before November this year, Donald Trump’s election victory, heavily funded by the crypto industry, propelled the stock even further. Shares are up 60% since the Nov. 5 election and finally surpassed their 2000 dotcom-era high on Nov. 11.

Saylor has long spoken about bitcoin in an evangelical way and co-authored a book about it in 2022 titled “What is Money?” But his critics have become louder than ever lately, describes Saylor as a cult-like leader and his strategy as one “ponzi loop” it involves issuing debt and equity to buy bitcoin, watching MicroStrategy’s stock price rise, and then doing more of the same.

“Wash, rinse, repeat – what could go wrong?” wrote Peter Schiff, chief economist and global strategist at Euro Pacific Asset Management, in a Nov. 12 post on X to his 1 million followers.

Saylor, who has 3.8 million followers, addressed the growing chorus of skeptics last week in an interview with CNBC’s “Money Movers.”

“Like developers in Manhattan, every time Manhattan real estate goes up in value, they issue more debt to develop more real estate, that’s why your buildings are so tall in New York City,” Saylor said in a clip that has become posted to X by his legion of fans. “It’s been going on for 350 years. I’d call it an economy.”

Saylor is a frequent guest on CNBC and appears on various programs throughout the year. He also agreed to two interviews with CNBC.com, one in September and another shortly after the election.

The first of these chats came back at Lotte, just a few elevator stops from the penthouse where he was staying the night before his stock hit the Nasdaq. Saylor gave a conference keynote at the hotel and held meetings on the side.

He wore a designer suit and an orange Hermes tie that matched the bitcoin’s stated color. With the election less than two months away, crypto companies pumped money into the Trump campaign after the Republican candidate and former president previously called bitcoin a “fraud against the dollar,” started guaranteeing a much more crypto-friendly administration.

Two months earlier, in July, Trump gave a keynote at the year’s biggest bitcoin conference in Nashville, Tennessee, where he vowed to fire SEC Chairman Gary Gensler, an industry critic, and said the US would become the “crypto capital of the planet” if he won.

MicroStrategy has become even more aggressive with its bitcoin purchases. Saylor said in one post on December 16, that over a six-day stretch from December 9, his company had acquired 15,350 bitcoins for 1.5 billion.

So far this year, MicroStrategy has acquired 249,850 bitcoin, with nearly two-thirds of those purchases occurring since November 11.

“We were going to do it regardless,” Saylor said, referring to the election results. “But what was a headwind has become a tailwind.”

A week before the election, MicroStrategy announced in its quarterly magazine earnings release a plan to raise $42 billion over three years. That included a stock sale of up to $21 billion through financial firms including TD Securities and Barclays, opening up much more liquidity for bitcoin purchases.

Saylor told CNBC that it was “probably the most important earnings call in the company’s history.”

No ownership is too much for Saylor, who predicted in September that bitcoin could reach $13 million by 2045, which would equate to 29% annual growth.

“We’re just going to keep buying the top forever,” he said in the same television interview, comparing bitcoin to New York real estate. “Every day is a good day to buy bitcoin. We see it as cyber Manhattan.”

Saylor speaks glowingly of bitcoin as the foundation of a new digital economy that’s only getting bigger. But even since his bitcoin strategy took off in 2020, there have been pockets of serious pain for investors — the stock lost 74% of its value in 2022 before rallying for the past two years.

Still, he advises companies to emulate his strategy. Microsoft wasn’t listening, but Saylor said there are plenty of “zombie companies,” with core businesses going nowhere, that could put their money to better use.

“The traditional advice would be you make a transformational acquisition, you find you need a merger partner. You’re dead in the water. Go find somebody to merge with,” Saylor said at Lotte in September. “Bitcoin is the universal fusion partner, right? The real appeal of digital capital is that you can fix any business.”

CLOCK: CNBC’s full interview with MicroStrategy CEO Michael Saylor