MicroStrategy is slowly catching up to Wall Street’s Big Tech

Michael Saylor has a plan to boost MicroStrategy’s authorized Class A shares to 10.3 billion, far above its current 330 million. It puts it in the same league as Wall Street tech giants like Amazon and Alphabet.

The shareholder vote to approve this proposal is set for January 21, and with Saylor controlling 47% of the voting power, the outcome seems inevitable at this point.

If it goes through, Bloomberg reports that MicroStrategy will have more authorized shares than all but four of the largest players in the Nasdaq 100 (Nvidia, Apple, Alphabet, and Amazon). The company has doubled its Bitcoin holdings in less than a year. Now it’s worth over $44 billion, after ten straight weeks of purchases.

Saylor’s ambitious bet on Bitcoin

Back in October, MicroStrategy announced a $42 billion plan to buy Bitcoin over three years. By using an at-the-market share issuance program and debt sales, the company is reportedly already two-thirds of the way through its $21 billion allotment for stock issuance.

While most Wall Street companies would shy away from diluting their shares to this extent, MicroStrategy is leaning in hard. Analysts like Ed Clissold of Ned Davis Research admit this would normally “not be viewed positively” because it dilutes earnings per share and voting rights.

But traditional metrics don’t seem to apply to MicroStrategy anymore. Its stock has soared more than 2,500% since it jumped into Bitcoin in 2020, compared to Bitcoin’s own 800% gain. Clearly, the market sees something it likes.

But there’s more to the story. Class A shareholders don’t hold much sway here. Most of the company’s voting power lies with Saylor’s Class B shares. This lopsided power dynamic means Saylor can keep steering the company without much pushback.

Why investors aren’t pushing back

MicroStrategy isn’t facing backlash from shareholders over this plan. Instead, it has become a darling of Wall Street. Hedge funds have jumped in, buying up its fixed-income securities for convertible arbitrage strategies.

This demand has allowed the company to issue $6.2 billion in convertibles this year alone, with another $6.5 billion in equity offerings still available under its current plan.

But Goldman Sachs analysts believe that MicroStrategy’s appeal as a leveraged Bitcoin play might fade if the company relies too heavily on equity instead of debt. Even Saylor himself has admitted this, calling for “more intelligent leverage” in a December interview with Bloomberg.

He added that: “We have $7.2 billion dollars of converts, but $4 billion of them are essentially equity, they’re through the strike price, the call price, and they are trading with a delta of approximately 100%, they are looking like equity.” Meanwhile, he has stayed coy about any direct ties to the incoming administration. When asked if he’s met with Trump, Saylor deflected but admitted he’s spoken with “a lot of people” connected to the administration. He also expressed openness to joining the White House’s crypto advisory council, saying, “If I’m asked to serve, I would probably do so.”

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