MicroStrategy CEO Michael Saylor stated that he is prepared to persuade investment guru Warren Buffett to use Berkshire Hathaway's $325 billion cash reserve to buy Bitcoin. He pointed out at the Microsoft shareholder meeting that if Microsoft adopts a Bitcoin strategy, its profits could increase. In a podcast interview on November 18, Saylor criticized Berkshire Hathaway, led by Buffett, for its cash management strategy, arguing that it is inefficient. He emphasized the ineffectiveness of Berkshire's $325 billion cash reserves, which he believes can only generate a maximum of 3% after-tax returns while facing a 15% capital cost.
He further stated that the resulting 12% negative real yield is equivalent to a $32 billion loss in shareholder value each year. When discussing Berkshire's $325 billion cash holdings, he emphasized, "This $325 billion will destroy $32 billion every year, they will destroy $3 billion in capital every month." Under Saylor's leadership, MicroStrategy strongly advocates for the adoption of Bitcoin as a financial asset. He believes that Bitcoin has unique advantages, such as preventing inflation and currency devaluation, and encourages companies with excess cash reserves to consider it as part of their financial strategy. However, he acknowledges that each business has unique financial goals, risk tolerance, and regulatory considerations, making universal advice impractical. Instead, MicroStrategy's approach is a case study on how Bitcoin fits into forward-thinking, tech-savvy corporate strategies, allowing companies to assess whether this approach suits their specific circumstances. According to the company's latest disclosures, it has been actively accumulating Bitcoin, with a holding of 386,700 coins. Saylor speculated that even traditionalists like Buffett could be persuaded to adopt Bitcoin. He quoted Buffett's late business partner Charlie Munger on a podcast: "I’ll bet if I could be alone with Buffett for an hour in a quiet environment, when I leave he would say Bitcoin is a good idea. Munger would love it. We should buy some." Saylor then expanded his criticism to those holding large cash reserves without exploring alternatives like Bitcoin. "What I’m saying is I’d be happy to visit anyone who has $100 billion in cash sitting idle, burning off $10 billion in shareholder value each year. I would come to visit you, give you all the information you need to persuade you to shift to a Bitcoin standard," Saylor added, emphasizing his belief that Bitcoin is a superior wealth preservation asset. Decrypt reported that at Microsoft’s December 2024 shareholder meeting, Saylor’s presentation outlined how Microsoft could convert its current $200 billion capital allocation into Bitcoin holdings, showing the potential to reduce enterprise value risk from 95% to 59%, while increasing annual returns from 10.4% to 15.8%.
Saylor told the board, "Bitcoin is a universal, permanent, and profitable merger partner." He likened this strategy to acquiring a $100 billion company with a 60% annual growth rate and 1x revenue. Saylor views Bitcoin as a unique corporate acquisition target for Microsoft, providing data showing that Bitcoin’s annual return rate (ARR) is 62%, while Microsoft’s ARR is 18%, and Bitcoin does not present the typical complexities and risks of traditional mergers and acquisitions (M&A). Saylor stated that Bitcoin is an ever-available acquisition target that can absorb capital while providing higher returns compared to Microsoft’s current dividend and buyback strategies. This analogy seems primarily aimed at Microsoft’s board and executive leadership, who are familiar with traditional M&A dynamics but may be seeking new ways to deploy capital at their existing scale. Saylor also believes Bitcoin has a unique ability to resist traditional business and geopolitical risks. He emphasized "counterparty risk," addressing a key issue for corporate finance departments: the need to rely on the performance, stability, or cooperation of other entities. When combined with his earlier slide showing Microsoft’s current 95% risk value metric, this point becomes even more compelling: Saylor is essentially arguing that Microsoft’s current financial strategy exposes them to all these counterparty risks, while Bitcoin offers a significant way to reduce that risk.
Saylor continued to outline the distinction of Bitcoin as a "commodity rather than a company," emphasizing his point: unlike Microsoft’s current treasury assets, the value of Bitcoin does not depend on the performance or stability of any single entity. He stated that this aligns with a broader trend in corporate treasuries seeking uncorrelated assets for risk management. By using the Bitcoin24 model, an open-source simulation model for Bitcoin adoption, Saylor demonstrated how Microsoft could transition its current position (market cap of about $3 trillion, net cash of $27 billion, cash flow of $70 billion, and annual growth rate of 10%) into a larger, more robust financial foundation. In October, Microsoft asked shareholders to vote on whether it should invest in Bitcoin. "Do the right thing for your customers, employees, shareholders, country, world, and your legacy," Saylor concluded, making a final push for one of the most significant corporate adoptions of Bitcoin to date. He ultimately called on Microsoft shareholders to "adopt Bitcoin."
