Michael Saylor's big bet on Bitcoin was to be his downfall. Instead, it has helped him reap a huge profit from his holdings of the cryptocurrency and MicroStrategy shares.
According to Securities and Exchange Commission filings, MicroStrategy's billionaire CEO has earned $370 million so far this year by selling hundreds of thousands of company shares under a stock sale plan agreed to with the company last year.
But that doesn't include his enormous paper profits. As of Friday, the combined value of Saylor's total MicroStrategy shares (excluding those in the stock sale plan) and his last disclosed count of personal Bitcoin was about $3.49 billion. That's an increase of about 60%, or more than $1 billion, since the start of the year. And since the beginning of 2023 – when the crypto sector began to recover – his stock and Bitcoin holdings gave him a paper profit of around almost $3 billion.
MicroStrategy stock has exploded in value since January as Bitcoin hit new highs, partly due to the launch of new exchange-traded funds that track the token. Shares of MicroStrategy are up 86% after rising more than 300% in 2023. Shares closed Friday down 2.8% at about $1,174. Meanwhile, Bitcoin is up 46% in 2024 and has jumped nearly 300% since the start of 2023.
Saylor, the former crypto skeptic turned believer, has made MicroStrategy a proxy for Bitcoin's success. Over the past four years, the company has purchased billions of dollars worth of tokens, sometimes using leverage. While he was CEO in 2020, Microstrategy purchased its first Bitcoin tokens, spending $250 million to purchase 21,454 at an average price of about $12,000 each.
Four years and multiple purchases later, MicroStrategy owns more than 214,000 Bitcoin, about 1% of all tokens in circulation. At Saturday's price of about $64,000 per bitcoin, MicroStrategy's holdings are worth about $13.7 billion. Since Saylor owns about 12% of the company's shares, his stock holdings and personal stash of more than 17,000 Bitcoin contribute significantly to his net worth of nearly $4 billion, according to Forbes.
MicroStrategy did not immediately respond to Fortune's request for comment.
But Saylor wasn't always so lucky. After becoming a billionaire through MicroStrategy during the dot-com boom, Saylor faced his biggest obstacle. In 2000, MicroStrategy announced that its 1999 sales were 25% lower than originally claimed. The accounting scandal cost him $6 billion in one day – the most any single person had ever lost in 24 hours. The SEC accused him of violating federal securities laws later that year, and he settled the charge by paying $8 million to the agency without admitting any wrongdoing.
Later, Saylor's Bitcoin moves were also viewed as crazy by investors and analysts. At least one analyst, David Trainer of research firm New Constructs, told Fortune in 2022 that Saylor “grossly misallocated his investors' capital” with his Bitcoin purchases.
“As far as crazy people go, Saylor is 'Elon Junior,' without the business chops,” Trainer said at the time.
For a while, it seemed like the naysayers were right. After MicroStrategy scored a huge success (at least on paper) when Bitcoin reached its previous peak in November 2021, the company's approach backfired when Bitcoin prices collapsed. MicroStrategy was one of the worst-performing large-cap stocks in 2022, largely due to falling Bitcoin prices.
Still, Saylor never wavered in his devotion. Last month, Saylor told CNBC that Bitcoin would “eat gold” and replace it as the most common store of value.
It may be too early to tell how MicroStrategy's plan to become the preferred proxy for Bitcoin will play out, especially after several spot Bitcoin ETFs designed to do the same were approved by the SEC in January became.
Nevertheless, Saylor isn't worried in the slightest with his newly minted millions.
“Is there a company in the world that you wouldn't want to invest in that could borrow $1 billion at less than 1% interest to invest in your best idea?” he told CNBC.
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