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In summary
- Michael Saylor proposed to Microsoft to convert $200 billion into Bitcoin, promising to reduce risks and increase returns to 15.8% annually.
- Saylor presented Bitcoin as an asset without counterparty risks, ideal for diversifying corporate treasury in the face of geopolitical challenges.
- Using simulations, Saylor showed how Bitcoin could add $5 trillion to Microsoft’s market value by 2034, transforming its financial position.
MicroStrategy co-founder Michael Saylor shared a detailed Bitcoin adoption strategy with Microsoft’s board, demonstrating how the tech giant could reach up to $584 per share and create nearly $5 trillion in shareholder value by 2034 through various Bitcoin treasury strategies.
Microsoft shares are up 14% so far this year to $423.46, according to data from Google Finance.
At Microsoft’s December 2024 shareholder meeting, Saylor’s presentation outlined how Microsoft could convert its current $200 billion in equity distributions into Bitcoin holdings, showing the potential to reduce enterprise value at risk from 95% to 59%. while improving annual returns from 10.4% to 15.8%.
“Bitcoin is the universal, perpetual merger partner,” Saylor told the board, likening the strategy to acquiring “a $100 billion company growing at 60% annually at 1x revenue.”
Universal and perpetual
Saylor presented Bitcoin as a unique corporate acquisition target for Microsoft, presenting data showing Bitcoin’s 62% annual rate of return (ARR) compared to Microsoft’s 18% ARR, one that doesn’t come with the complexities and risks. typical of traditional mergers and acquisitions (M&A).
Bitcoin is an always-available acquisition target that could absorb capital while delivering superior returns compared to Microsoft’s current strategy of dividends and share buybacks, Saylor said.
The metaphor seems primarily aimed at Microsoft’s board of directors and executive leadership, who are familiar with traditional M&A dynamics but are seeking new avenues for deploying capital at their current scale.
Bitcoin has no ‘counterparty risk’
Saylor also presented Bitcoin as uniquely resistant to traditional commercial and geopolitical risks. Its emphasis on “counterparty risk” addressed a key concern for corporate treasuries: the need to depend on the performance, stability or cooperation of other entities.
When combined with his previous slides showing Microsoft’s current 95% value at risk metric, this point becomes more powerful: Saylor is essentially arguing that Microsoft’s current treasury strategy leaves them exposed to all of these counterparty risks. ,s that Bitcoin offers a path to significantly reduce that exposure.
Saylor went on to draw a distinction between Bitcoin as a “commodity, not a company,” reinforcing his argument that, unlike Microsoft’s current treasury holdings, Bitcoin’s value is not dependent on the performance or stability of any single entity. This relates to broader corporate treasury trends of seeking uncorrelated assets for risk management, he said.
Using the Bitcoin24 Model, an open source simulation model for Bitcoin adoption, Saylor demonstrated how Microsoft could transform its current position—approximately $3 trillion in market value with $27 billion in net cash and $70 billion in cash flow growing at 10% annually—on a substantially larger and more robust financial base.
In October, Microsoft asked its shareholders to vote on whether it should invest in Bitcoin.
“Do the right thing for your customers, your employees, your shareholders, the country, the world, and your legacy,” Saylor concluded, making a final push for what would represent one of the most significant corporate adoptions of Bitcoin to date. “Adopt Bitcoin.”
Edited by Sebastian Sinclair
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