MW Calling MicroStrategy the Domino's of crypto, Saylor tries to justify the huge premium to bitcoin holdings

By Jules Rimmer

For all the sophisticated technospeak and complex financial engineering that characterized Michael Saylor's presentation to investors Thursday evening, it was a story as old as the hills: a salesman pitching his wares and trying to build a brand.

The earnings call was astonishing enough in itself. MicroStrategy (MSTR) - or just Strategy, as the company calls itself outside of Securities and Exchange filings - owns 553,555 bitcoins, 2.6% of the total outstanding, worth $52 billion at an average cost of $68,459. The current market price (BTCUSD) is about $97,000. After the CEO and CFO had made their perfunctory announcements, it was time for Saylor to bring some panache to proceedings.

Related: MicroStrategy doubles down on its bitcoin bet

His explication of MicroStrategy was in parts highly technical, with reference to its status as a 'crypto reactor' and its generation of 'bitcoin torque' and in others, a more straightforward evangelism of the bitcoin message. Saylor trumpeted the creation of the U.S. government's strategic bitcoin reserve, its deeper integration into the U.S. financial system and its gradual adoption by institutional asset managers as a legitimate investment vehicle.

With an equity market cap of $109 billion and an net asset value less than half of that, all sales of stock through its at-the-market offering of $21 billion are NAV-accretive. You could call this financial wizardry or a breathtaking demonstration of salesmanship. It's both. It's an exceedingly virtuous circle. Having raised $3.4 billion in convertible bonds and preferred stock in the first quarter, Saylor said he is eager to earn a credit rating for his bonds that the rating agencies have been reluctant to confer for now. Admittedly, if an issuer's creditworthiness is a function of its willingness and its ability to repay its debt, then the company could, plausibly, lay claim to investment-grade credentials. Credit agencies, less sanguine about bitcoin's future prospects, may harbor doubts that it can continually tap investors to repay debt.

Saylor identified four kinds of potential MicroStrategy shareholder on a scale of ascending conviction: the skeptic, the trader, the tech investor and the maximalist. The first category expects no price appreciation in bitcoin, while the latter (among whom Saylor numbers himself) expect 30% annualized return rate well into the future. His show, with its torrential output of math, investment logic and relentless positivity, made an argument for MicroStrategy as the optimal vehicle for expressing a bullish view on bitcoin.

What Saylor has succeeded in achieving last night, and over the past five years, is attracting attention, first, to bitcoin, then to his investment vehicle. As a PR stunt, Saylor managed to draw attention from more market-impactful earnings releases from Amazon and Apple. Social media has been flooded with memes and soundbites.

He drew eye-catching analogies with Domino's Pizza and Diet Coke in terms of MicroStrategy's brand recognition, go-to status and first-mover advantage.

If the U.S. president can sell worthless meme coins and monetize his celebrity and influence, then Saylor's advertised strategy looks almost prudent in comparison.

Rather than trying to conceal the huge NAV premium over the value of the bitcoin holdings, Saylor sought to justify it, citing its investability, its deep liquidity, its creditworthiness and its franchise value.

It's unusual to see the executive chairman of a company boast about the volatility of his stock and encourage investors to sell call options on it. That's confidence - or bravado.

-Jules Rimmer

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May 02, 2025 06:37 ET (10:37 GMT)

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