2024-04-20
MicroStrategy founder Micheal Saylor has made waves in the financial world as a prominent advocate for Bitcoin.
Last summer, he strategically entered into a stock-sale plan with his company, which has proven to be a lucrative move.
The plan allowed him to sell up to 400,000 shares in the first four months of 2024, and with the completion of this plan approaching, Saylor has already earned approximately $370 million from this year's stock sales.
This significant profit can be attributed to the skyrocketing value of MicroStrategy, which essentially functions as a bitcoin holding company.
Saylor, who established MicroStrategy in 1989 as a software and tech consulting business and still serves as chairman, has gained recognition as a bitcoin advocate in recent years. In a recent interview with BLOCKSKY, he boldly stated that cryptocurrency will "eat gold."
Since announcing its strategy to enter the crypto market in mid-2020, MicroStrategy has utilized its balance sheet and capital markets to acquire over 214,000 bitcoins.
These holdings, equivalent to approximately 1% of the total number of bitcoins in existence, are currently valued at around $13.6 billion.
This accounts for the majority of MicroStrategy's $21.3 billion market capitalization.
Despite experiencing a 37% pullback from its March peak, MicroStrategy's stock has been highly successful, climbing 91% this year and soaring 346% in 2023, making it one of the top performers in the US stock market.
As the largest shareholder of MicroStrategy, Saylor's Class B holdings are valued at approximately $2.3 billion.
In addition, he owns 400,000 Class A shares, which he is now selling at a rapid pace.
MicroStrategy disclosed in its third-quarter earnings filing that Saylor had entered into a 10b5-1 plan in September.
This agreement allows him to sell up to 5,000 shares every trading day from January to April of this year, totaling 400,000 shares.
These shares are tied to a vested stock option that will expire if not exercised by April 30, 2024.
To date, Saylor has sold 370,000 shares, amounting to $372.7 million. As of the latest sale, his Class A holdings have reduced to 30,000 shares. However, MicroStrategy has not provided any comment on these stock sales.
While some analysts view these sales as entirely programmatic and unrelated to Saylor's confidence in MicroStrategy or the stock price, there are differing opinions among retail investors.
Speculation on Reddit suggests that Saylor may be selling for other reasons, potentially to buy bitcoin directly.
Some Redditors claim to be following Saylor's lead by selling their own shares. In April, the stock witnessed a 29% decline, while bitcoin experienced an 11% drop.
However, analysts like Mark Palmer from Benchmark dismiss these concerns, stating that such viewpoints are misinterpretations by investors and traders.
He asserts that the truth is already disclosed and easily accessible.
Despite the stock sales, the majority of Saylor's wealth remains tied up in his Class B holdings of MicroStrategy, along with his ownership of 17,732 bitcoins purchased in 2020, currently valued at around $1.1 billion.
The surge in bitcoin and related investments can be attributed to the approval of bitcoin exchange-traded funds earlier this year and the upcoming halving event.
This event, which occurs every four years, reduces rewards for bitcoin miners and slows down the rate of new bitcoins entering the market.
Saylor believes that MicroStrategy has an advantage in the market because it serves as a leveraged bitcoin play without charging management fees.
The company can raise funds to further invest in cryptocurrencies. Last month, MicroStrategy successfully raised $782 million at a 0.625% interest rate through a convertible debt sale, specifically to acquire more bitcoin. In an interview with BLOCKSKY, Saylor emphasized the company's ability to leverage its position and attract capital due to the volatility of the market.
He posed a rhetorical question, asking if there is any other company in the world that could borrow $1 billion at less than 1% interest to invest in their best idea.
Palmer from Benchmark remains bullish on MicroStrategy, especially with the halving event approaching.
Historically, the price of bitcoin has surged following previous halving events, indicating potential future growth.
Overall, despite the ongoing stock sales, MicroStrategy continues to hold a strong position in the market, and Saylor's involvement and investments in bitcoin further contribute to its appeal.
