No Need to Convince Shareholders – Microstrategy’s Investors Already Sold on Bitcoin, Says Analyst

Investment banker Ellie Frost has put out a Twitter thread showing that four of Microstrategy’s top 10 shareholders had already been bullish on bitcoin before Michael Saylor company’s big dive into the digital asset.

According to Frost, Microstrategy did not have much convincing to do, as top shareholders Blackrock, Russell Investments, Renaissance Tech, and Citron Fund already had documented interest in bitcoin (BTC).

Saylor has stated that it only took six months to get investors’ approval for moving $250 million into BTC – a process Frost argues should take about a year, at the minimum. In her final analysis, the tech investment banker observed:

They were already open to it. The fast timeline implies others were also curious. They don’t want to miss the boat and the fact that [bitcoin] has survived 12yrs shows it’s ‘not just a fad’.

The case of the 8th largest Microstrategy shareholder Russell Investment, who has increased their position in the company by more than 70%, shows why it was not hard work to bring shareholders on board.

“They’ve bullishly blogged on BTC since 2018 with quotes like… ‘While many are questioning bitcoin’s foundations, perhaps even more importantly, bitcoin is questioning the foundations of the central banks,’” said Frost.

Tenth-placed Renaissance Tech has increased their shareholding by four times since June during the same period that they got internal approval to trade bitcoin futures. The period coincided with Microstrategy’s public statement that it was considering alternative treasury reserve assets. Renaissance Tech gave its approval, knowing that bitcoin was on the table.

The Citron Fund went from being publicly bearish on bitcoin for three years to calling Microstrategy “the best BTC exposure available on the stock market today.” “Citron bought up shares in MSTR (Microstrategy) and released their investment thesis valuing them at $700/share. It is ~145% increase from the current price of $286,” Frost noted.

Blackrock’s shareholding went down by 5%, but the company remains the largest overall investor with 15% of the total outstanding shares. “They’re also the world’s largest asset manager, managing $8 trillion. Their chief investment officer said two weeks ago ‘BTC is here to stay.’ Their CEO went further saying that BTC could replace gold,” Frost tweeted.

Frost also cited the lack of other options as a third factor. “Many investment funds have governing charters which don’t allow investing in crypto. For others, they’ve cited concern over custody/security. Basically every fund can invest in stocks, but w/ GBTC you pay a premium. MSTR is the best of both worlds.”

According to Frost, if Saylor’s strategy proves a success, the top investors could use it to advocate for BTC at their other portfolio companies. Microstrategy has bought up to $475 million worth of bitcoin, or 40,824 BTC, since August – the largest holding of any publicly-traded company. The firm is planning to spend an additional $635 million on bitcoin.

What do you think about Microstrategy’s top shareholders’ attitude towards bitcoin? Share your thoughts in the comments section below.

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