The man making billions from the wildest bitcoin bet

Summary
MicroStrategy’s Michael Saylor is buying as much of the cryptocurrency as he can. Some big-name investors are going along for the ride.Michael Saylor’s company doesn’t market any hot products or services. What he and MicroStrategy do is sell new shares and debt, at a pace rarely seen in corporate history. Saylor plows all that money into bitcoin, vowing to keep doing it, over and over.
MicroStrategy shares are up about 690% in the past year and the 59-year-old executive chairman’s approximately 10% stake is worth about $9.7 billion, while he personally owns an additional $1.9 billion or so of bitcoin.
Saylor has emerged as the public face of the recent bitcoin craze, with nearly 4 million followers on X. To celebrate bitcoin topping $100,000, Saylor hosted a New Year’s Eve party for several hundred members of the crypto community at his waterfront, Miami-area estate, near his luxury yacht. A half-dozen dancers dressed in gold performed. Celebrities mingled with investing luminaries, including Bill Miller, the former Legg Mason fund manager; Peter Briger, chairman of Fortress Investment Group; and Mark Casey, a key portfolio manager at Capital Group. The event was livestreamed on YouTube to tens of thousands of bitcoin fanatics as Saylor, in a black blazer and a bitcoin T-shirt, presided.
Enthusiasm for Saylor’s company is so rabid it has resulted in a head-scratching situation: MicroStrategy owns about $47 billion of bitcoin, but its shares are worth about $97 billion. It’s as if investors are paying $2 for a $1 bill. Just as surprising: Sophisticated investors have been among the biggest buyers, including mutual-fund power Capital Group, which owned about 8% of the company as of Sept. 30, and Norges Bank Investment Management, Norway’s $1.5 trillion sovereign fund, which owned nearly 1%.
Fans say the premium reflects confidence that Saylor can continue to produce profits betting on bitcoin. Only 21 million coins will be created, a scarcity that boosts its value, they argue. By issuing equity at lofty levels, and selling debt at friendly terms to the company, Saylor can create value for shareholders as he expands MicroStrategy’s bitcoin horde, says Richard Byworth, a partner at SYZ Capital, who personally owns MicroStrategy stock.
“The premium is justified and will always be there," says Jordi Visser, a Wall Street veteran who worked at Morgan Stanley and recently purchased MicroStrategy shares. “No company can do what he’s done. They own about 2% of bitcoin—who can own more of it?"
There’s serious risk attached to Saylor’s strategy. He rode past investment waves until they crested and then crashed, losing billions of dollars of personal wealth, sometimes in a single day.
Saylor declined to comment for this article.
Saylor, a lifelong bachelor who turns 60 next month, has endured a series of career setbacks and run-ins with financial authorities and others. Last year, he agreed to pay Washington, D.C., $40 million to settle an income tax dispute, after Washington officials alleged that he previously lived in the District, not in Florida or Virginia as he claimed, and should have paid D.C. taxes.
The son of a career Air Force officer, Saylor studied aeronautics and science at Massachusetts Institute of Technology and was part of the Air Force Reserve Officer Training Corps. A few years after graduation, he launched MicroStrategy in 1989 with college friends in Tysons Corner, Va., as a data-mining software company.
MicroStrategy soared during the late-1990s dotcom bubble. Saylor’s stock was worth about $10 billion, more than enough cash for lavish parties and Caribbean cruises for employees and others. Saylor’s company also purchased domain names including Mike.com, Michael.com, Hope.com and Voice.com, which it sold for $30 million.
It all collapsed in 2000 when the internet bubble burst. MicroStrategy was forced to restate its revenues and earnings, as regulators scrutinized how the industry booked revenues. The flameout was so dramatic it drew the attention of tabloids: In March of that year, the New York Daily Newsran a headline: “Lost $6 Billion in a Day" with a photo of a then-35-year-old Saylor, clean shaven and in a suit and tie, a dazed look on his face.
Saylor has been a public face of Bitcoin, speaking at a 2023 conference, above.
Later that year, Saylor and two other executives, along with the company, paid $11 million to settle accounting-fraud charges filed by the U.S. Securities and Exchange Commission related to the restatements, in which the SEC alleged the company inflated revenue and earnings, showing profits rather than losses, allegations Saylor and the others didn’t admit to or deny.
In July 2002, MicroStrategy shares closed at 45 cents, down from a high of $313 in 2000 as the company dealt with debt problems.
Over lunch in Bridgehampton, N.Y., venture-capitalist Rick Rickertsen commiserated with Saylor Rickertsen asked Saylor if he was worried about losing his business.
“I might," Saylor said. “But I’ll just start something new."
Saylor restructured MicroStrategy debt and did a 10-for-1 reverse stock split, averting crisis. For years, Saylor searched for the next big thing. For a while, Saylor made personal profits betting on stocks like Google and Apple but was dismissive of cryptocurrencies, tweeting in 2013 that bitcoin’s “days are numbered."
By 2020, MicroStrategy shares had barely moved in years and promised little growth. It was worth just $1.5 billion, though it was profitable and boasted approximately $500 million in cash.
Spending time in his Miami estate in 2020 during the Covid-19 pandemic, Saylor tried figuring out what to do with the company’s cash. Worried about a potential surge in inflation, as the government spent money to keep the economy afloat, Saylor studied bitcoin anew. He became a believer. Soon, Saylor was pitching his board on the idea of using the cash to buy bitcoin. They agreed, mostly because there didn’t seem to be any better alternatives for the company. At the least, the bet would draw some useful attention, they figured.
“The company was going nowhere, it had almost no Wall Street following," says Rickertsen, who had become a board member. “It was bleak."
That year, Saylor spent half the company’s money, about $250 million, to buy bitcoin at a price of around $11,000. Saylor put over $100 million of his own money in it, too. Right away, bitcoin’s price tumbled to $9,000, costing MicroStrategy about $40 million.
‘Most of us on the board said “Oh my gosh, what have we done, we’re all gonna be sued",’ Rickertsen says. “Mike was worried too."
The panic didn’t last long. Bitcoin began climbing, finishing 2020 above $26,000. MicroStrategy borrowed a few billion dollars to purchase even more bitcoin, at one point relying on a $205 million, floating-rate loan at a 8.27% rate, challenging terms at the time.
Then came the collapse of crypto exchange FTX in late 2022. Bitcoin tumbled below $17,000 and MicroStrategy shares fell to about $17. The cost basis of the company’s bitcoin was around $30,000, so it was sitting on paper losses. Rumors spread that the company was in trouble. Saylor and the company doubled down. They took advantage of difficulties at its lender, Silvergate Bank, which was also hurting due to crypto, to pay $161 million to buy back their $205 million loan.
The stock began to soar as Saylor ramped up his strategy of selling shares and debt to buy bitcoin—and as bitcoin climbed. In 2024 alone, MicroStrategy raised $23.2 billion from stock and bond sales, one of the largest hauls by a company in a single year, according to Mark Palmer, an analyst at the Benchmark Company, an investment bank.
Saylor’s pitch can be repetitive and simplistic, and he sometimes speaks in a halting manner. But he’s always evangelical in his belief in bitcoin. He stresses that it has limited supply, unlike the dollar or even gold. That helps bitcoin do a better job protecting against inflation, Saylor argues. He also says bitcoin’s digital nature makes it easier and cheaper for holders to store and use, avoiding the need for intermediaries and making it a “revolutionary" form of money.
Some mutual funds and others have internal guidelines barring them from buying bitcoin or even bitcoin exchange-traded funds, so MicroStrategy shares are a backdoor way for them to place a wager on the currency. Even some big, conservative investors see the stock as a way to potentially gain an edge over competitors more reluctant to dabble in a crypto company.
Saylor has proved adept at creating different kinds of equity and debt investments—rolling out bank loans, convertible bonds, common shares and more—to keep the cash faucet flowing.
“His genius is he’s creating different products for different audiences," says Brett Messing, an executive of SkyBridge Capital, which manages funds with substantial exposure to bitcoin and advises a fund that holds MicroStrategy shares.
Over the past month or so, Saylor has promoted MicroStrategy and bitcoin on television shows and high-profile podcasts, at industry conferences and elsewhere. “If you are not buying bitcoin at the top, you are leaving money on the table," he recently tweeted.
“He’s pretty bombastic in public, but more nuanced in private settings," says Matt Hougan, chief investment officer of crypto asset manager Bitwise, who heard Saylor speak at a dinner for 12 investors last summer. His company manages an ETF that owns MicroStrategy.
If bitcoin keeps rising, the premium to hold MicroStrategy could continue to exist. If bitcoin tumbles, though, MicroStrategy stock likely will follow. Even if the premium dissipates, while bitcoin holds up, shares likely would be hurt. Vehicles that share some similarities, such as closed-end funds, often trade at a discount to their holdings, rather than at a premium, skeptics note.
The company may not face an existential threat, though. MicroStrategy currently has $7.26 billion of unsecured debt, most of which was sold at super-low interest rates. And it holds—or HODLs, in the parlance of bitcoin fans—450,000 bitcoin at an average cost of around $62,000. Bitcoin would have to fall below $16,000 and remain around that level as its debt comes due, for the company’s bitcoin to be worth less than its debt.
Just over a week ago, Saylor unveiled a brand-new way for MicroStrategy to raise money from investors to fuel its bitcoin purchases. He announced that the company will sell $2 billion of “perpetual preferred" shares this quarter. The news sparked Palmer, the analyst, to reiterate his $650 price target for the stock, about 65% higher than current levels.
Write to Gregory Zuckerman at Gregory.Zuckerman@wsj.com