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

The eve of Microstrategystock market debut in June 1998, founder Michael Saylor was staying 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 lead underwriter Merrill Lynch.

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

Shares of MicroStrategy jumped 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 are linked again, but for a completely different reason. In December 2024, Saylor appeared before Microsoft shareholders to try to convince them that the company, now valued at more than $3 trillion, should put some of its $78.4 billion in cash, equivalents and short-term investments . 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 did everything in this strategy. MicroStrategy has acquired 439,000 bitcoin since mid-2020, a stockpile that is now worth about $42 billion and is the basis for the explosion of the company’s market capitalization to $82 billion from about $1.1 billion when the plan has been laid.

MicroStrategy’s software unit, which specializes in business intelligence, generated just over $100 million in revenue a quarter. After soaring in 1998 and 1999, the stock collapsed in the dot-com bust, losing almost all of its value. In the decades that followed, it slowly bounced back clear up because of bitcoin.

Four years into its bitcoin buying spree, MicroStrategy is the world fourth largest holderbehind only the creator Satoshi Nakamoto, BlackRock’s iShares Bitcoin Trust and crypto exchange Binance.

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

But the show provided Saylor, now 59, another opportunity to preach the gospel of bitcoin and tout the benefits of converting as much money as possible into that single digital asset. It’s a story that Wall Street has swallowed.

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

While the demonstration was in full force well before November of this year, By Donald Trump electoral victory, financed heavily from the crypto industry, has propelled the stock even further. Shares have rallied 60% since the Nov. 5 election, and finally surpassed their dot-com era high since 2000 on Nov. 11.

Saylor has long spoken about bitcoin in an evangelical fashion and co-authored a book about it in 2022 titled “What is money?” But his critics have become stronger than ever of late, describing Saylor as a cult leader and his strategy as a “ponzi loop” which 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 possibly go wrong?” wrote Peter Schiff, chief economist and global strategist at Euro Pacific Asset Management, in a November 12. placed 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 was posted to X by his legion of fans. “It went on for 350 years. I call it an economy.”

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

The first of those chats took place back at Lotte, just an elevator ride from the penthouse where he was staying the night before his stock hit the Nasdaq. Saylor was giving a conference speech at the hotel and taking meetings on the side.

He wore a designer suit and an orange Hermes tie, matching the designated color of bitcoin. The election was less than two months away, and crypto companies were pumping money into Trump’s campaign after the Republican candidate and former president, who previously called bitcoin a. “scam against the dollar”, began to guarantee a much more friendly administration of crypto.

Two months earlier, in July, Trump gave a presentation at the biggest bitcoin conference of the year in Nashville, Tennessee, where he promised to disappear the SEC chair Gary Gensleran industry critic, and said the US would become the “crypto-capital of the planet” if he wins.

“I think the election year inspired the crypto community to find its voice, and I think it catalyzed a lot of enthusiasm that was dormant,” Saylor said in the September interview. “When Trump came out tentatively positive, that was a big boost to the industry. When he came out completely positive, that was another boost.”

Until this year, MicroStrategy was one of the few ways that many institutions could buy bitcoin. Because MicroStrategy was an equity, investment firms did not need special provisions to own it. The environment changed in January, when the SEC approved spot bitcoin exchange-trading funds, which allows investors to buy ETFs that track the value of bitcoin.

Since Trump’s victory, everything has been to the right. Bitcoin is up 41% and BlackRock’s ETF is up 39%. Gensler Prepares to Leave SEC, Trump Picks Deregulation Advocate and Former SEC Commissioner Paul Atkins to replace it.

Venture capitalist David Sacks, an outspoken conservative who hosted a fundraiser for Trump in San Francisco, will be Trump’s “White House AI & Crypto Czar.” announced earlier this month in a post on his Truth Social platform.

“With the red sweep, bitcoin is rising with the winds, and the rest of the digital assets are starting to rise as well,” Saylor told CNBC in a phone interview shortly after the election. He said bitcoin remains the “safe haven” in the crypto space, but as a “digital asset framework” is put in place for the broader crypto market, “there will be growth across the digital asset industry,” he said.

“Taxes are coming down. All the rhetoric about unrealized capital gains tax and wealth taxes is off the table,” Saylor said. “All the hostility from regulators to banks touching bitcoin” is also going away, he added.

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

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

“We’re going to do it anyway,” 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 release of earnings 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 single most important earnings call in the company’s history.”

No amount of property is too much for Saylor, who predicted in September that bitcoin could hit $13 million by 2045, which equates to 29% annual growth.

“We’ll just keep buying the top forever,” he said in the same TV interview where he compared bitcoin to New York real estate. “Every day is a good day to buy bitcoin. We look at it as cyber-Manhattan.”

Saylor speaks glowingly of bitcoin as the foundation of a new digital economy that will only get bigger. But even since his bitcoin strategy began in 2020, there have been pockets of severe pain for investors – the stock lost 74% of its value in 2022 before rising in the last two years.

However, he advises companies to imitate his strategy. Microsoft didn’t listen, but Saylor said there are many “zombie companies,” with core businesses going nowhere that could make better use of their money.

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

WATCH: The full CNBC interview with MicroStrategy CEO Michael Saylor