Michael Saylor, co-founder and executive chairman of software intelligence firm Microstrategy (Nasdaq: MSTR), criticized the cash management strategy of Warren Buffett’s Berkshire Hathaway during a Nov. 18 interview on the PBD Podcast.
Saylor highlighted the inefficiencies of Berkshire’s $325 billion cash reserve, which he argued generates a mere 3% after-tax yield at best while facing a 15% cost of capital. The resulting 12% negative real yield, according to Saylor, equates to $32 billion in annual shareholder value erosion. Commenting on Berkshire sitting on $325 billion in cash, the Microstrategy executive chairman stressed:
That $325 billion is destroying $32 billion a year. They are destroying $3 billion a month in capital.
Microstrategy, particularly under the leadership of Saylor, has strongly advocated for the adoption of bitcoin as a treasury asset. Saylor has argued that BTC offers unique advantages, such as protection against inflation and currency debasement, and has encouraged companies with excess cash reserves to consider it as part of their treasury strategy. However, he acknowledges that every business has unique financial goals, risk tolerances, and regulatory considerations, and thus a universal recommendation would not be practical.
Instead, Microstrategy’s approach serves as a case study for how bitcoin can fit into a forward-looking, tech-savvy corporate strategy, leaving it to individual companies to evaluate whether such an approach aligns with their specific circumstances. The firm has been aggressively accumulating bitcoin, with holdings reaching 386,700 BTC, according to its latest disclosure.
Saylor speculated that even traditionalists like Warren Buffett could be persuaded to adopt BTC. Referencing Charlie Munger, Buffett’s late business partner, he stated during the podcast:
I’d be willing to bet you that if I had an hour alone with Buffett in a calm environment, I’d walk out and he would say this bitcoin thing is a pretty good idea. Charlie [Munger] would have liked it. We’re going to buy some.
The Microstrategy executive chairman extended his critique to others who hold significant cash reserves without exploring alternatives like bitcoin. “I will say for the record I’m happy to go visit anybody that has a hundred billion of cash that’s sitting and burning $10 billion of shareholder value a year. I will go visit you and provide you with all of the information you need in order to be convinced that you should flip to the bitcoin standard,” Saylor added, underscoring his belief in bitcoin as a superior asset for wealth preservation.
