From decrypt by Vince Dioquino

MicroStrategy founder Michael Saylor at Bitcoin Nashville 2024. Photo: Decrypt/André Beganski

MicroStrategy co-founder Michael Saylor shared a detailed Bitcoin adoption strategy with Microsoft's board of directors, demonstrating how the tech giant could reach up to $584 per share for its stock and create nearly $5 trillion in shareholder value by 2034 through various Bitcoin treasury strategies. 

Microsoft stock is up 14% year-to-date to $423.46, according to Google Finance data.

Speaking at Microsoft's December 2024 shareholder meeting, Saylor's presentation outlined how Microsoft could convert its current $200 billion in capital distributions into Bitcoin holdings, showing potential for reducing enterprise value at risk from 95% to 59% while improving annual returns from 10.4% to 15.8%.

"Bitcoin is the universal, perpetual, profitable merger partner," Saylor told the board, comparing the strategy to acquiring "a $100 billion company growing at 60% per year at 1x revenue."

Universal and perpetual

Saylor framed Bitcoin as a unique type of corporate acquisition target for Microsoft, presenting data that shows Bitcoin's 62% annual return rate (ARR) compared to Microsoft's 18% ARR, one that doesn't come with the typical complexities and risks 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 buybacks, Saylor said.

The metaphor seems mainly targeted at Microsoft's board and executive leadership, who are familiar with traditional M&A dynamics but may be seeking new avenues for capital deployment at their current scale.

Bitcoin has 'no counterparty risk'

Saylor also framed Bitcoin as uniquely resistant to traditional business and geopolitical risks. His emphasis on "counterparty risk" addressed a key concern for corporate treasuries: the need to depend on other entities' performance, stability, or cooperation.

When combined with his earlier 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 these counterparty risks while Bitcoin offers a path to reduce that exposure significantly.

Saylor goes on to outline a distinction between Bitcoin as a "commodity, not a company," reinforcing his argument that, unlike Microsoft's current treasury holdings, Bitcoin's value isn't dependent on any single entity's performance or stability. This plays into 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—into a substantially larger and more robust financial foundation.

In October, Microsoft asked its shareholders to vote on whether it should invest in Bitcoin.

"Do the right thing for your customers, employees, shareholders, the country, the world, and your legacy," Saylor concluded, making a final push for what would represent one of the most significant corporate Bitcoin adoptions to date. "Adopt Bitcoin."