MicroStrategy, a business intelligence software company, has lost money in each of its last four quarters but its value has never been higher. Despite recording a record net loss of $2 billion in 2023, the company’s market capitalization has surged to over $7 billion due to its massive Bitcoin holdings.
The company’s CEO, Michael Saylor, is known for his aggressive investment strategies and has been at the forefront of the cryptocurrency market since 2020. He has led the company to accumulate billions of dollars worth of Bitcoin and has stated that he will never sell.
However, critics argue that the company’s value is built on a “house of cards” based on Bitcoin, which could collapse if the cryptocurrency’s price drops or if the company needs to convert its reserves into cash. In the worst-case scenario, Strategy’s emphasis on Bitcoin could put it in a bind, as any drop in Bitcoin’s price would reduce the value of the company’s overall holdings.
Saylor’s strategy has taken the company to new heights before, but also raised concerns about its long-term sustainability. In 2022, Strategy’s holdings were worth $26 million less than the debt Saylor was obligated to pay at a time when Bitcoin’s price had collapsed to a two-year low.
Despite these risks, Saylor remains committed to his vision and has been credited with helping to drive the price of Bitcoin to record highs. However, it remains to be seen how long this can sustain in the long run.
The company’s journey began in 1989 when Saylor co-founded Strategy with two MIT classmates. The company quickly rose to become a leading beneficiary of the late ’90s tech boom and went public in 1998. After a scandal in 2000, Saylor’s personal fortune was wiped out, but he returned stronger than ever and began building his Bitcoin empire.
Saylor’s predictions about the future of technology have been notoriously accurate, from predicting the rise of mobile computing to making bold bets on cryptocurrency. But will this latest strategy pay off or prove to be a costly mistake? Only time will tell.
Source: https://fortune.com/2025/02/08/microstrategy-strategy-valuation-michael-saylor-bitcoin-risk