Author: Ben Weiss, DL News; Translated by: Deng Tong, Golden Finance.

MicroStrategy wants investors to know that it is hoarding Bitcoin.

MicroStrategy announced that the title of its first quarter performance report is: "Currently holding 214,400 Bitcoin."

In the second quarter, its announcement content was: "Currently holding 226,500 Bitcoin."

The company's founder and chairman Michael Saylor seems to do little on X except for flattering the world's largest cryptocurrency.

"Bitcoin is a swarm of network bumblebees serving the goddess of wisdom, feeding on the fire of truth," a featured post on his X profile stated.

But MicroStrategy is not just buying Bitcoin. It has 1,637 employees.

Executive Vice President and Chief Product Officer Saurabh Abhyankar stated that the vast majority of these employees are engaged in the company's data analytics products.

Yes, MicroStrategy's Bitcoin buying frenzy has made headlines — especially as the world's largest cryptocurrency set new historical highs and surpassed 100,000 USD.

As Bitcoin prices soared, MicroStrategy's stock price also surged.

The company's stocks listed on Nasdaq have increased by more than 450% this year, exceeding Bitcoin's 135% rise.

Despite the booming Bitcoin craze, MicroStrategy's employees are still developing low-key software for hotel operator Hilton, furniture retailer Crate & Barrel, and airlines Emirates.

Abhyankar stated that MicroStrategy's software products are a core part of its business — and are also a part of many people's daily lives in the USA and elsewhere.

You might already be using MicroStrategy, he said, because you are interacting with some big banks and large retailers.

Who does MicroStrategy serve?

MicroStrategy's flagship product, MicroStrategy ONE, is not aimed at everyday users like Uber or Google Search.

Their enterprise software runs in the background of large companies.

Abhyankar says, for example, retailers.

"Store managers need to do a lot to operate their business."

This includes data on store inventory, employee scheduling, and expected deliveries. This data and the software to categorize it are usually isolated.

In other words, the calendar used to manage employees is a different program from the one used to track store inventory.

But for large enterprises, having management and executives view everything through one platform is more efficient.

"Fundamentally, our platform allows you to connect data from all these different systems," says Abhyankar.

And since each company's software and data suites are different—Hilton and Crate & Barrel are not the same company—MicroStrategy's software must be flexible.

"Banks, retailers, hospitals, pharmaceutical companies, and so on – most of their businesses utilize MicroStrategy for operation," Abhyankar added.

Current clients include a variety of companies: Pfizer, the US Postal Service, and even the fried chicken giant KFC.

Initial Public Offering

However, investors did not rush to buy MicroStrategy stocks at prices above $370 because they are bullish on the company's ability to help hospitals operate more efficiently.

MicroStrategy went public for the first time in 1998. But in 2020, when Saylor announced that his company purchased 21,454 Bitcoins for approximately $0.25 billion, MicroStrategy attracted a new pool of investors.

He stated in a press release, "This investment reflects our belief that Bitcoin, as the most widely adopted cryptocurrency globally, is a reliable store of value and an attractive investment asset, with greater long-term appreciation potential than holding cash."

According to Bernstein analysts, MicroStrategy's Bitcoin financial strategy is as follows: use leftover cash from the software business to purchase Bitcoin. Purchase Bitcoin via issuing stocks or bonds. As the price of Bitcoin hopefully rises, the value of MicroStrategy's capital will also increase, which will boost MicroStrategy's stock price.

Since 2020, the company has accumulated over 402,100 Bitcoins, worth approximately $40 billion.

Agent of Bitcoin.

The stock price of MicroStrategy fluctuates in sync with the price of Bitcoin, especially this year, as the company has invested more and more of its resources into Cryptos.

Investors often view Cryptocurrency stocks as a proxy for Bitcoin—a simple and inexpensive way to lock in Bitcoin gains without directly interacting with the Cryptocurrency market.

In fact, Wall Street Analysts providing stock advice for institutional clients hardly mention the Software.

On Wednesday, Bernstein even viewed the Software division as a potential obstacle to MicroStrategy's inclusion in the benchmark Standard & Poor's 500 Index.

Bloomberg Intelligence Analyst James Seyffart shares the same view, asserting that the company's 'lack of profitability' is a barrier to being included in the S&P 500 Index.

Bernstein anticipates that MicroStrategy will continue to heavily invest in Bitcoin, driving its stock price to soar to $600 within the next 12 months.

Goodbye to the Software business?

MicroStrategy's intense focus on the world's largest cryptocurrency raises a question: Is its Software business heading towards decline?

From 2020 to 2024, quarterly revenue from Software sales has stagnated between 0.11 billion and 0.135 billion USD.

From the end of 2020 to the third quarter of 2024, MicroStrategy's employee count has decreased by 22%.

Abhyankar declined to disclose whether MicroStrategy is preparing to become a purely Bitcoin fund. "My goal is to grow the Analytics business," he said.

On the contrary, he said he believes the company's focus on Bitcoin complements its Software business.

He believes that MicroStrategy's soaring stock price helps attract and retain talent in Software, while its Bitcoin-centered balance sheet reduces the need for its Analytics business to pursue short-term profits at the expense of long-term gains.

He said that investors typically measure Software vendors by increases in quarterly revenue and customers. However, MicroStrategy's Bitcoin balance sheet adds another Indicator for Analysts to evaluate the company.

"My goal is to grow the Analytics business." - Saurabh Abhyankar

Our Bitcoin strategy alleviates this pressure, allowing us to take a long-term approach to implementing our engineering investments and innovation strategy," Abhyankar said.

Ultimately, he knows that MicroStrategy's data analytics business won't make the headlines. However, Abhyankar assures that most of the company's 1,637 employees are engaged in other activities, not just hoarding Bitcoin for Michael Saylor.

"Maybe we're just a small part of MicroStrategy," Abhyankar said, referring to the prominent position of the software business on the company's balance sheet. "But we are still an important part."