In today's USA stock night session, the stocks related to Cryptos stabilized and rebounded, with MicroStrategy rising by nearly 2%.

In June 1998, when MicroStrategy went public, the scrolling announcement in the trading hall still reminded traders not to confuse the stock code similar to MicroStrategy and Microsoft.

26 years later, MicroStrategy and Microsoft are linked again, but for completely different reasons. MicroStrategy founder and Director Michael Saylor stood in front of Microsoft shareholders, trying to persuade them that this company, currently with a Market Cap of over 3 trillion dollars, should invest a portion of its 78.4 billion dollars in cash, equivalents, and short-term investments into Bitcoin. Michael Saylor stated, "Microsoft cannot miss the next technology wave, and Bitcoin is that wave."

However, the vast majority of Microsoft shareholders do not agree with Michael Saylor's viewpoint, with less than 1% of Microsoft shareholders voting in favor.

In contrast, Michael Saylor invested everything in this strategy. Since mid-2020, MicroStrategy has purchased 0.439 million Bitcoins, which are currently valued at approximately 42 billion dollars, forming the basis for the company's Market Cap skyrocketing from about 1.1 billion dollars in mid-2020 to over 80 billion dollars now.

On Monday, MicroStrategy stated in a document that in the past week or so, the company bought 5,262 Bitcoins for about 0.561 billion dollars, with an average price of 106,662 dollars per Bitcoin. This brings the total number of Bitcoins held by the company to 444,262.

MicroStrategy's business intelligence software division has quarterly revenues slightly above 0.1 billion dollars. After soaring in 1998 and 1999, the stock plummeted during the burst of the Internet bubble, losing almost all of its value. Over the following decades, the stock slowly rebounded and then surged again thanks to Bitcoin.

After buying Bitcoin madly for four years, MicroStrategy has become the fourth largest holder of Bitcoin globally, following Bitcoin founder Satoshi Nakamoto, Blackrock's iShares Bitcoin Trust, and the cryptocurrency exchange Binance. This often causes MicroStrategy's stock performance to align with Bitcoin. Analysts believe that MicroStrategy's decision to buy Bitcoin to protect the value of its reserve assets is a key factor in enhancing its stock appeal.

Data shows that as of Monday's US stock market close, MicroStrategy has risen 426% this year, second only to AppLovin among US technology companies with a Market Cap of $5 billion or more. In 2023, MicroStrategy has gained a total of 346%.

Although MicroStrategy's rebound had already fully commenced before November, Trump's victory in the US presidential election, strongly supported by the cryptocurrency industry, further propelled the stock's rise. Since November 5th, MicroStrategy's stock price has increased by 60%, ultimately surpassing the high point since 2000 on November 11th.

Michael Saylor seems to have become the evangelist for Bitcoin. However, the criticism against him is louder than ever before. Critics label Michael Saylor as a 'cult-like leader,' and his strategy as a 'Ponzi scheme,' where he buys Bitcoin by issuing Bonds and Stocks to support MicroStrategy's stock price, then continues doing more of the same.

Presto Research analyst Min Jung stated that MicroStrategy's reliance on bitcoin to meet its financial needs may pose risks. He said, 'Currently, the favorable price trend of bitcoin allows MicroStrategy to maintain a positive feedback loop – the rise in MicroStrategy's stock price can increase financing, providing funds for further bitcoin purchases, which in turn boosts the price of bitcoin and the company's stock value. While this strategy is effective during a bull market, its sustainability largely depends on the continued appreciation of bitcoin.'

The well-known short-selling institution Citron Research pointed out at the end of November that MicroStrategy was 'overheated.' Analyst Andrew Left of Citron Research stated on the social media platform X that MicroStrategy has almost turned into a Bitcoin investment fund, and a short position has been taken against the company. With the introduction of Bitcoin ETF, investors can directly invest in Bitcoin funds without relying on MicroStrategy's stock as an alternative option.

Citron Research pointed out that under Michael Saylor's leadership, MicroStrategy has made massive purchases of bitcoin, even financing it through bond issuance. Michael Saylor leveraged capital markets to capitalize on the bitcoin frenzy, which also drove MicroStrategy's stock price to surge this year. However, Citron Research believes this looks more like a corporate finance version of a glitch in a video game that creates infinite money – profitable, addictive, and potentially unsustainable.

In response to the criticism, Michael Saylor stated, 'It's like the developers in Manhattan, every time the real estate prices in Manhattan rise, they issue more Bonds to develop more real estate. That's why buildings in New York are so high.' 'It has lasted for 350 years. I would call it the economy.'

It is worth mentioning that shortly after the US presidential election, Michael Saylor stated in an interview: "As the 'red wave' sweeps the market, Bitcoin is riding the wave, and other digital assets will also begin to soar." He noted that Bitcoin remains a "safe trade" in the crypto space, but with a broader 'digital asset framework' in place for the crypto market, the entire digital asset industry will experience a surge. He added: "Taxes will decrease. All discussions about unrealized capital gains taxes and wealth taxes are off the table. Regulators' hostility towards banks engaging with Bitcoin has also dissipated."

MicroStrategy has also become more aggressive in buying Bitcoin. So far this year, MicroStrategy has purchased over 255,000 Bitcoins, with approximately two-thirds bought after November 11.

A week before the US presidential election, MicroStrategy announced a plan called "21/21" in its quarterly earnings report, which aims to raise $42 billion in funding over the next three years—$21 billion through equity and $21 billion through debt—to purchase more Bitcoin. For Michael Saylor, owning more Bitcoin is not excessive. He predicted in September that by 2045, each Bitcoin could be valued at $13 million, equivalent to a 29% annual growth.

Michael Saylor believes that Bitcoin is the foundation of a new digital economy that will only grow larger, stating, "Every day is a good day to buy Bitcoin, even buying at the highest point is an optimistic investment." Although Microsoft has not heeded Michael Saylor's advice, he still suggests that companies imitate his strategy. He mentioned that there are many "zombie companies" whose core business has not developed at all, thus they could better utilize their cash.

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Editor/lambor