Berkshire Hathaway's $325 billion cash reserve is costing $32 billion each year, Michael Saylor stated, claiming he could convince Warren Buffett to accept bitcoin.

Michael Saylor, co-founder and Executive Chairman of Microstrategy (MSTR), criticized Berkshire Hathaway's cash management strategy in an interview on the PBD Podcast. He argued that Berkshire's holding of cash reserves up to $325 billion is causing significant losses for shareholders, with an after-tax return on equity reaching only 3%, while the cost of capital is up to 15%. As a result, the actual return on equity is negative 12%, leading to a loss of $32 billion in shareholder value each year. Saylor stated:

"That $325 billion is costing $32 billion a year. They are losing $3 billion a month in capital."

The Sage of Omaha Warren Buffett

Microstrategy, under Saylor's leadership, has strongly advocated for the use of bitcoin as a reserve asset. He argues that BTC offers unique benefits, such as protection against inflation and currency devaluation, and encourages companies with excess cash reserves to consider bitcoin as part of their financial strategy. However, he also acknowledges that each business has its own financial goals, risk tolerance, and regulatory factors, and thus cannot provide a one-size-fits-all recommendation.

Rather than recommending a one-size-fits-all approach, Microstrategy views the use of bitcoin as a case study on how a future-oriented financial strategy can be applied in modern companies. Microstrategy has been actively accumulating bitcoin, with its holdings reaching 386,700 BTC according to the latest announcement.

Saylor also suggests that even traditional investors like Warren Buffett could be convinced of BTC's value. He shared in a podcast:

"I dare say that if I had an hour alone with Buffett in a quiet space, when I came out, he would say 'Bitcoin is really an idea worth considering.' Charlie Munger (if he were alive) would also agree. We would buy some."

The Executive Chairman of Microstrategy continues to criticize individuals and organizations holding large cash reserves without exploring alternatives like bitcoin. "I am willing to meet anyone with $100 billion in cash that is costing $10 billion in shareholder value each year. I will visit you and provide all necessary information to convince you that it's time to switch to Bitcoin Standard," Saylor emphasized, affirming his strong belief in bitcoin as a superior asset to protect and grow asset value.

Microsoft could increase profits if it adopted a bitcoin strategy

Michael Saylor also shared a detailed strategy for adopting Bitcoin with Microsoft's board of directors, demonstrating that the tech giant could reach $584 per share and create nearly $5 trillion in shareholder value by 2034 through various Bitcoin reserve strategies.

Microsoft's stock has risen 14% since the beginning of the year, reaching $423.46, according to data from Google Finance.

Speaking at Microsoft's shareholder meeting in December 2024, Saylor presented how Microsoft could convert $200 billion of its current capital distribution into Bitcoin holdings, showing the potential to reduce risky enterprise value from 95% to 59%, while improving annual returns from 10.4% to 15.8%.

"Bitcoin is a permanent and profitable merger partner," Saylor told the board, comparing this strategy to acquiring "a $100 billion company growing at 60% per year with a revenue multiple of 1x."

permanent and global

Saylor has presented Bitcoin as a unique acquisition target for Microsoft, presenting data showing that Bitcoin's annual return (ARR) is 62%, compared to Microsoft's ARR of 18%, without the complexities and risks often associated with traditional mergers and acquisitions.

Bitcoin is a constantly available acquisition target, capable of absorbing capital and delivering superior returns compared to Microsoft's current strategy of dividends and stock buybacks, according to Saylor.

This metaphor primarily targets the board of directors and executive leaders of Microsoft, who are familiar with the elements of traditional mergers and acquisitions but may be seeking new avenues for capital deployment at their current scale.

Bitcoin has no partner risk

Saylor also emphasized that Bitcoin has the potential to withstand traditional business and geopolitical risks. He highlighted "partner risk," a major concern for corporate reserve funds: the need to rely on the performance, stability, or cooperation of other entities.

When combined with previous slides showing the 95% current value risk ratio of Microsoft, this argument becomes even stronger: Saylor is arguing that Microsoft's current reserve strategy puts them at all these partner risks, while Bitcoin provides a way to significantly mitigate that level of risk.

He also distinguishes Bitcoin as a "commodity, not a company," reinforcing the argument that, unlike Microsoft's current reserves, the value of Bitcoin does not depend on the stability or performance of any entity. This relates to the widespread trend of seeking uncorrelated assets to manage risk in corporate reserve funds.

Using the Bitcoin24 Model, an open-source simulation model for Bitcoin adoption, Saylor demonstrated how Microsoft could transform its current position — about $3 trillion in market value with $27 billion in net cash and $70 billion in cash flow growing at 10% annually — into a larger and more powerful financial platform.

In October, Microsoft asked shareholders to vote on whether to invest in Bitcoin.

"Do the right thing for customers, employees, shareholders, the country, the world, and your legacy," Saylor concluded, making a final appeal for one of the most significant adoptions of Bitcoin by companies to date. "Embrace Bitcoin."


Source: https://tapchibitcoin.io/michael-saylor-dang-thuyet-phuc-warren-buffett-va-microsoft-mua-bitcoin.html