(Bloomberg) — Michael Saylor's unusual decision to hold Bitcoin instead of cash on MicroStrategy's books has turned the once-obscure software maker into the upper echelon of one of the richest companies when it comes to financial assets. I jumped into the club.
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The Tysons Corner, Virginia-based company's roughly $26 billion Bitcoin Cash is tied to global market leaders such as International Business Machines Inc., Nike Inc. and Johnson & Johnson Inc., according to data compiled by Bloomberg. of cash and securities. Only about a dozen companies, led by Apple Inc. and Alphabet Inc., have more assets than this in their corporate treasuries.
Co-founder and chairman Saylor decided to invest in Bitcoin as an inflation hedge in 2020 as MicroStrategy's revenue growth stagnated. The company initially used operating cash for acquisitions, but has transitioned to using proceeds from the issuance and sale of stock and the sale of convertible debt to leverage purchasing power. The company became the largest publicly traded holder of the digital currency.
While the strategy has been met with skepticism from traditional corporate governance observers, it has been embraced by investors as a leveraged way to participate in the Bitcoin rally without using digital wallets or crypto exchanges. are. Since mid-2020, the company's stock has soared more than 2,500% while Bitcoin's value has soared by about 700%, making it the best-performing major U.S. stock over the same period. Bitcoin reached a record of almost $93,500 on Wednesday.
“Their balance sheet is primarily driven by the price of Bitcoin,” said Dave Zion, founder of Zion Research Group, a Chadds Ford, Pennsylvania-based firm that specializes in accounting and tax issues. speak “They can't control the price of Bitcoin, so they just ride the wave, and that wave can go up or down.”
Most corporate treasurers use a company's financial assets to support the business or generate profits, such as paying dividends or funding stock buybacks. Thaler argued that shareholders can benefit from a buy-and-hold strategy even if the company doesn't pay dividends.
MicroStrategy has devised a proprietary performance metric called Bitcoin Yield. It measures the percentage change in the ratio of Bitcoin holdings to assumed diluted shares outstanding from one period to the next. This year-to-date yield is 26.4%.
