MicroStrategy wants investors to know that it’s stockpiling Bitcoin.
The headline announcing its first-quarter results reads: “Now holds 214,400 BTC.”
For the second quarter, the announcement read: “Now holds 226,500 BTC.”
And Michael Saylor, the founder and chairman of the company, seems to do little else on X other than fawn over the world’s largest cryptocurrency.
“Bitcoin is a swarm of cyber hornets serving the goddess of wisdom, feeding on the fire of truth,” reads the featured post on his X profile.
But MicroStrategy doesn’t just buy Bitcoin. It has 1,637 employees.
And the vast majority of those employees work on the company’s data analytics products, Saurabh Abhyankar, executive vice president and chief product officer, told DL News.
(He wouldn’t say how many employees are focused exclusively on Bitcoin.)
Yes, MicroStrategy’s Bitcoin-buying sprees attract headlines — especially as the world’s largest cryptocurrency has set all-time highs on its way past $100,000.
As Bitcoin’s price skyrockets, so does MicroStrategy’s share price.
Its stock, listed on the Nasdaq, is up more than 450% this year, beating Bitcoin’s 135% surge.
Still, despite the Bitcoin fever, MicroStrategy employees plug away on unflashy software for companies like hotelier Hilton, furniture retailer Crate & Barrel, and the airline Emirates.
Abhyankar says that MicroStrategy’s software offerings are a core part of its business — and daily life for many in the US and elsewhere.
“You’re probably already using MicroStrategy,” he said, “because you’re interacting with some of these big banks and big retail.”
‘Connect the dots’
MicroStrategy’s marquee product, MicroStrategy ONE, isn’t like Uber or Google Search, which target everyday users.
Its enterprise software works behind the scenes at big businesses.
Take, for example, a retailer, Abhyankar said.
“There’s a whole bunch of things that the store manager needs to run their operations.”
That includes data on store inventory, employees’ schedules, and anticipated deliveries. This data, and the software that catalogues it, are often siloed.
In other words, the calendar used to manage employees is a separate program from that used to track store inventory.
But for big businesses, it’s more efficient for managers and higher-ups to view everything through one platform.
‘Bitcoin is a swarm of cyber hornets serving the goddess of wisdom.’
Michael Saylor
Enter MicroStrategy.
“Fundamentally, what our platform does, it allows you to connect the data from all these different systems,” Abhyankar said.
And because each company’s suite of software and data are different — Hilton and Crate & Barrel aren’t the same businesses — MicroStrategy’s software has to be flexible.
“Banks and retailers and hospitals and pharmaceuticals and whatnot — chunks of their business leverage MicroStrategy to operate every single day,” Abhyankar added.
Current customers include a potpourri of corporations: Pfizer, the United States Postal Service, and even fried chicken giant KFC.
Debut
Investors, though, aren’t gobbling up MicroStrategy stock at more than $370 because they’re bullish on the company’s ability to help hospitals operate more efficiently.
MicroStrategy first debuted shares to the public in 1998. But, in 2020, MicroStrategy attracted a new set of investors when Saylor announced that his company had bought 21,454 Bitcoin for approximately $250 million.
“This investment reflects our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash,” he said in a press release.
MicroStrategy’s Bitcoin financial strategy developed as follows, according to analysts from Bernstein: Buy Bitcoin with surplus cash from its software business. Buy Bitcoin through equity or debt issuances. And as Bitcoin’s price — hopefully — increases, so will the value of MicroStrategy’s treasury, which will lift MicroStrategy’s stock.
Since 2020, the company has amassed more than 402,100 Bitcoins, worth approximately $40 billion.
Bitcoin proxy
MicroStrategy’s stock has moved in lockstep with Bitcoin’s price, especially this year as the company has piled more and more company resources into the cryptocurrency.
Investors have seen crypto stocks in general as a proxy for Bitcoin — an easy, cheap way to lock in Bitcoin gains without directly interacting with crypto markets.
In fact, Wall Street analysts who advise institutional clients on the stock barely mention the software.
On Wednesday, Bernstein even framed the software division as a potential hindrance to MicroStrategy’s inclusion in the benchmark S&P 500 Index.
That argument was echoed by Bloomberg Intelligence analyst James Seyffart, who cited the company’s “lack of profit” as a hurdle to inclusion in the S&P 500.
Bernstein expects MicroStrategy to keep piling into Bitcoin, sending the shares skyrocketing to $600 in the next 12 months.
Goodbye software?
MicroStrategy’s monomaniacal focus on the world’s largest cryptocurrency begs the question: Is its software business on the way out?
From 2020 to 2024, quarterly revenue from software sales stagnated between $110 million and $135 million.
And the number of employees at MicroStrategy has dropped 22% from the end of 2020 to the third quarter in 2024.
Abhyankar declined to say whether MicroStrategy was set to become a pure Bitcoin treasury fund. “My goal is to grow the analytics business,” he said.
Instead, he said he believes that the company’s Bitcoin focus complements its software side.
MicroStrategy’s skyrocketing stock price helps attract and retain software talent, and its Bitcoin-centric balance sheet reduces the need for its analytics business to chase short-term profits at the expense of long-term gains, he argued.
Investors usually measure software vendors through increased quarterly revenue and customers, he said. MicroStrategy’s Bitcoin-laden balance sheet, however, adds another metric through which analysts evaluate the company.
‘My goal is to grow the analytics business.’
Saurabh Abhyankar
“Our Bitcoin strategy takes that pressure off so we can take a long-term approach to our engineering investments and innovation strategy,” Abhyankar said.
Ultimately, he knows that MicroStrategy’s data analytics business doesn’t grab headlines. Still, Abhyankar guarantees that the majority of the company’s 1,637 employees are doing something other than just stockpile Bitcoin for Michael Saylor.
“Maybe we’re a small part of MicroStrategy,” Abhyankar said, in reference to the software business’ prominence on the company’s balance sheet. “But we’re still an important part.”
Ben Weiss is DL News’ Dubai Correspondent. Got a tip? Email him at bweiss@dlnews.com.
