MicroStrategy Rides 'Red Sweep' for 477% Gain in 2024, Top Tech Stocks

Eve Accurate strategystock market First time In June 1998, founder Michael Saylor stayed in a penthouse suite at Lotte New York's mansion in midtown Manhattan. Saylor, who was 33 at the time, says it was the most amazing hotel room he had ever seen, paid for by major company Merrill Lynch.

The next morning, Saylor went to the Nasdaq floor to watch his company's shares open. He noted seeing a note scroll across the indicator, warning traders: “Please do not confuse MSTR with MSFT.” The latter belongs to Microsofta software giant that went public 13 years ago.

MicroStrategy shares rose 76% in its debut, joining the parade of technology companies benefiting from the dot-com boom.

“It was a good day,” Saylor told CNBC.

More than 26 years later, MicroStrategy and Microsoft are linked together again, but for a very different reason. In December 2024, Saylor stood before Microsoft shareholders to try to convince them that the company, now valued at more than $3 trillion, should put some of its $78.4 billion in cash, cash equivalents and short-term investments into… Bitcoin.

“Microsoft can't afford to miss the next technology wave, and Bitcoin is that wave,” Saylor said in a video presentation. Released in X Last week. The post received more than 3.6 million views.

Saylor has gone with this strategy. MicroStrategy has bought 439,000 bitcoins since mid-2020, a stock now worth about $42 billion and the basis for the company's market cap exploding to $82 billion from about $1.1 billion when the plan was put into action.

MicroStrategy's software unit, which specializes in business intelligence, generates just over $100 million in revenue each quarter. After zooming in 1998 and 1999, the stock collapsed in the dot-com bust, losing almost all of its value. In the decades that followed, it rebounded as slowly as before Rocket up Because of Bitcoin.

Four years after its Bitcoin buying spree, MicroStrategy is the best in the world The fourth largest pregnant womanbehind the sole creator Satoshi Nakamoto, BlackRock's iShares Bitcoin Trust And cryptocurrency exchange Binance.

At Microsoft, a shareholder vote backed by Saylor failed by a wide margin—less than 1% of its investors voted in favor.

But the scene provided Saylor, now 59, another opportunity to preach the gospel of Bitcoin and promote the benefits of transferring as much cash as possible to that one digital asset. It's a story that Wall Street is devouring.

MicroStrategy shares were up 477% this year as of Friday's close, second To only AppLovin Of all U.S. technology companies valued at $5 billion or more, according to FactSet data. This follows a 346% increase in 2023.

While the rally was in full force before November of this year, Donald Trump election victory, Funded It was heavily influenced by the cryptocurrency industry, pushing the stock further. Shares have risen 60% since the Nov. 5 election, finally surpassing their dot-com-era highs since 2000 on Nov. 11.

Saylor has long spoken about Bitcoin in an evangelical manner and co-wrote a book about it in 2022 called “What Is Money?” But his critics have become louder than ever recently, a description Saylor as a cult-like leader and his strategy as a leader “Ponzi ring” This involves issuing debt and equity to buy bitcoin, watching MicroStrategy's stock price rise, and then doing more of the same.

“Wash, rinse, repeat – what could go wrong?” Peter Schiff, chief economist and global strategist at Euro Pacific Asset Management, wrote on November 12. Share on X To his 1 million followers.

Saylor, who has 3.8 million followers, addressed the growing group of skeptics last week in an interview with CNBC's “Money Movers.”

“Just like developers in Manhattan, every time the value of real estate in Manhattan goes up, they issue more debt to develop more real estate, and that's why your buildings are so tall in New York City,” Saylor said, in a clip posted on the website. X by his legion of fans. “It's been going on for 350 years. I like to call it an economy.”

Saylor is a frequent guest on CNBC, appearing on various programs throughout the year. He also agreed to do two interviews with CNBC.com, one in September and one shortly after the election.

The first of those chats returned to the Lotte Hotel, a few elevator stops from the penthouse where he stayed the night before his stock hit the Nasdaq. Saylor was giving a keynote address at a conference at the hotel and holding meetings on the side.

He was wearing a tailored suit and an orange Hermes tie, matching the specific color of Bitcoin. The election was less than two months away, and cryptocurrency companies were pouring money into the Trump campaign after the Republican nominee and former president, who previously described Bitcoin as… “Dollar fraud” It began to ensure more convenient crypto management.

Two months ago, in July, Trump gave a keynote speech at the largest Bitcoin conference of the year in Nashville, Tennessee, where… a promise To remove the head of the SEC Gary Genslera critic of the industry, said the United States would become the “cryptocurrency capital of the planet” if he wins.

“I think the election year inspired the crypto community to find its voice, and I think it stimulated a lot of enthusiasm that had been dormant,” Saylor said in a September interview. “When Trump came out initially positive, that was a big boost for the industry. When he came out completely positive, that was another boost.”

Until this year, MicroStrategy was one of the few ways many institutions could purchase Bitcoin. Because MicroStrategy was stocks, the investment companies did not need any special provisions to own them. The environment changed in January, when It is approved by the Securities and Exchange Commission Bitcoin exchange-traded funds, allowing investors to purchase ETFs that track the value of Bitcoin.

Since Trump's victory, everything has been moving in the right direction. Bitcoin is up nearly 41% and BlackRock ETFs are up 39%. Gensler prepares to leave SEC, Trump picks deregulatory advocate and former SEC commissioner Paul Atkins To replace him.

Venture capitalist David Sachs, an outspoken conservative who hosted a fundraiser for Trump in San Francisco, will be the “AI and cryptocurrency czar in the White House.” Announce Earlier this month in a post on his Truth Social platform.

“With the red sweep, Bitcoin is going up strongly, and the rest of the digital assets will also start going up,” Saylor told CNBC in a phone interview, shortly after the election. Bitcoin remains the “safety trade” in the cryptocurrency space, but as a “digital asset framework” is put in place for the broader cryptocurrency market, “there will be a boom in the entire digital asset industry,” he said.

“Taxes are going down. All the talk about unrealized capital gains taxes and wealth taxes is off the table,” Saylor said. He added that “all the hostility on the part of regulators to banks that handle bitcoin” is also disappearing.

MicroStrategy has become more aggressive in its Bitcoin purchases. Saylor said in a mail On December 16, over the course of six days starting on December 9, his company acquired 15,350 bitcoins for $1.5 billion.

So far this year, MicroStrategy has acquired 249,850 bitcoins, with nearly two-thirds of those purchases since November 11.

“We were going to do it regardless,” Saylor said, referring to the election results. “But what was a headwind has become a tailwind.”

A week before the election, MicroStrategy announced in its quarterly report Earnings release A plan to raise $42 billion over three years. This included the sale of up to $21 billion worth of shares through financial firms including TD Securities and Barclays, opening up more liquidity to buy Bitcoin.

Saylor told CNBC that this was “probably the most important earnings call in the company's history.”

It's not a huge amount of ownership for Saylor, who in September predicted that bitcoin would reach $13 million by 2045, which equates to 29% growth annually.

“We're going to keep buying the top forever,” he said in the same TV interview where he compared Bitcoin to New York real estate. “Every day is a good day to buy bitcoin. We look at it as a cyber Manhattan.”

Saylor speaks enthusiastically about Bitcoin as the foundation of a new digital economy that will only get bigger. But even since he began his Bitcoin strategy in 2020, there have been pockets of extreme pain for investors — the stock lost 74% of its value in 2022 before rallying over the past two years.

However, he advises companies to imitate his strategy. Microsoft didn't listen, but Saylor said there were plenty of “dead companies,” with core businesses that aren't going anywhere that could make better use of their money.

“The conventional advice would be, if you do a transformative acquisition, you need a merger partner. You're dead in the water. Go find someone to merge with,” Saylor said at Lotte in September. “Bitcoin is the global merger partner, right? The real appeal of digital capital is that you can fix any company.”

He watches: Full CNBC interview with MicroStrategy CEO Michael Saylor