All Your Models are Destroyed — The Rise and Future Fall of MicroStrategy

My interest in the story of MicroStrategy started out tangential at first — it was just one of many unconventional outcomes born out of the rising Bitcoin phenomenon. The publicly traded company, although first in the world to pursue a Bitcoin accumulation strategy, flew under the radar of most conventional investors, and it was only after the long Bitcoin winter of 2022 and early 2023 that both old and new narratives from the company and its de facto leader, Michael Saylor, broke through the thawing ice and began to spread among a bewildered audience. 2024 catapulted MicroStrategy to new sensational heights, and I soon realized I was witnessing financial history in the making. The general enthusiasm was unparalleled; sons went “all in” with the savings of their parents while old investors bought new houses from quick gains on leveraged positions. Any public display of hesitation to the many optimistic narratives energizing investment circles was met with scorn or silence. When logical arguments against the company’s ever higher valuation to net assets were put forward, they were answered by vague appeals to unofficial thought leaders or to a vision of a utopian future. On the verge of letting this one be altogether and mentally filing it as just another financial bubble soon to pop, I finally made the decision to work on this report as a veiled but growing Ponzi-scheme element of MicroStrategy’s business became ever clearer. So, having delved deep into the facts and fiction underlying common investor assumptions, it is now my firm belief that what is going on with MicroStrategy will end in disaster for most investors, should affairs not radically alter. It is a play of five parts, presented chronologically to the reader.

MicroStrategy’s early history is laid to rest behind a thin curtain, mostly undisturbed by the hands of modern investors. It is known by a few that the company reached big and fell even bigger in the Dotcom Crash of the year 2000, but which growing Internet-focused company wasn’t experiencing great hardships at that time? Yet, could there be clues from those years which could be relevant today, to where the fate of MicroStrategy is heading? Let’s blow away the dust, break the crypt open and see what the passing of decades has caused to be all but forgotten.

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