MicroStrategy / MSTR

About MicroStrategy

1861 International Dr., McLean, Va. 22102
www.microstrategy.com | 703-848-8600 | Founded: 1989

Industry: Information Technology | Category: Public Companies

MicroStrategy last year spent much of its resources buying up its own stock. The company bought back more than 2.5 million shares during the second quarter of 2005 at a cost of $127.6 million, and in July the board authorized the repurchase of an additional $300 million of MicroStrategy stock over five years. In October and November, the company spent $6.9 million repurchasing shares.
By taking shares out of circulation, stock repurchases boost earnings per share and help prop up stock prices. MicroStrategy's buybacks fueled speculation that Saylor might be preparing to take the company private. In July, the company terminated a plan that helped employees acquire MicroStrategy stock.
In August and September, Bansal sold a chunk of his MicroStrategy holdings.
The board's compensation committee awarded Saylor an unusual midyear bonus of $800,000. By some measures, the company's performance weakened in the months that followed. Compared with the same periods the year before, diluted earnings per share declined by 74.5 percent during the second half of 2005 after rising by 42.4 percent during the first half of 2005; revenue rose by 8.3 percent during the second half after rising by 26.7 percent during the first half of the year, and pretax income rose by 16.8 percent during the second half after rising 91.2 percent during the first half.
For the second half of 2005, and again for 2006, the compensation committee established a formula linking Saylor's bonus to diluted earnings per share.
In April, MicroStrategy hired Grant Thornton LLP to audit its books after PricewaterhouseCoopers LLP decided it no longer wanted the job.
MicroStrategy last year stopped predicting its sales and earnings, making it harder for analysts to track the company.
The company won a legal victory in July when a federal judge dismissed a rival company's claim that MicroStrategy had infringed on its patent.
In December, the board authorized the company to bestow a variety of perks on board members, executives and other employees. Under the policy, MicroStrategy insiders can use corporate suites, club memberships, tickets to sporting events and other "corporate development programs" if the company isn't using them for business purposes.

Chairman and CEO: Michael J. Saylor

2005 Financial Data

Revenues: $268,662,000 | Net Income: $64,743,000
Asssets: $277,773,000 | Earnings Per Share: $4.19
Total employees: 1,005 | Local employees: 542