MicroStrategy's Bitcoin Transformation

A story about how MicroStrategy, led by Michael Saylor, transformed from a traditional software company to a major Bitcoin holder.

"He had a bunch of cash, I think he had like $500 million of cash. The $500 million was sitting on the company's balance sheet. He personally started to get interested in Bitcoin, he bought some personally - I think he bought like $250 million of Bitcoin and disclosed that.

Then the company said maybe we should buy Bitcoin as well. The truth was his stock was flat or going down for a long time. If you look at the MicroStrategy chart from 2007 to 2020 before he started making his bet, the stock was basically flat for 13 years.

What he realized was they're not giving us any credit - we're basically valued at the amount of cash we have, they're not valuing the business really at anything. The business is going to produce more cash but they don't believe that we can invest this well or that we can reinvest our cash well to grow the enterprise value of the company.

So we have two choices: we either dividend out all the cash or we gotta do something with it that's gonna get our stock price to go up. He was stuck between a rock and a hard place where he had this business that was too successful to not continue, but his share price would not move because investors just simply did not believe any of the stories about what they could do with the cash.

He went from owning 0 Bitcoin in July of 2020 to today having more than 210,000 Bitcoin, which is more than 1% of the Bitcoin network and worth more than $10 billion."