Bitcoin is a bank in cyberspace, run by incorruptible software, offering a global, affordable, simple, & secure savings account to billions of people that don't have the option or desire to run their own hedge fund.
~ Michael Saylor
Michael Saylor will no longer be the CEO of MicroStrategy, and will be changing his role to an Executive Chairman which will allow him to focus all things Bitcoin. As the news of this shift in the company leadership was spreading, Saylor tweeted the following:
In my next job, I intend to focus more on #Bitcoin. ₿
Some may say, "It's about time Michael Saylor let somebody else run the company". In fact, some friends I talk expressed the criticism of his focus from running the company and to bitcoin. It is true, ever since Saylor discovered bitcoin, he has been super obsessed with it. He is probably the most obsessed person with bitcoin. I say it as a compliment. This obsession is very genuine, fully based on solid reasoning and fascination with the innovation.
Not only Saylor has been successful in building solid company, he is also longest serving CEO of a public company. Regardless all the criticisms, Saylor has built a very profitable company that managed to accumulate a lot of cash and preservation of the value of this company cash is what lead him to seek solutions to wealth preservation and lead him to bitcoin.
Some of the news say he is resigning because company will be reporting $1.9 billion in losses. I am not totally convinced with such statements. I think this has been in plans and Saylor was ready to move on and fully focus on Bitcoin a while back. Planning and executing such transitions take time. While it may be true that MicroStrategy will be reporting losses in billions, I think it is just an accounting requirement or strategy to take impairment charge on their bitcoins. While they don't plan to sell their bitcoins anytime soon, on paper they might have been accruing losses.
Since their bitcoin strategy is a long term one, I wouldn't take report of losses seriously. They have expressed multiple times that it would take bitcoin to go as low as $3k for MicroStrategy to receive a margin call and start worrying about their investment position. Even then they have other options to deal with such situations. While possible, bitcoin's price dropping to anything close to $3k seems unimaginable at this point.
There are also questions like, was it wise for MicroStrategy to invest in bitcoin. There aren't many companies who are invested in bitcoin. And even among those who have invested in bitcoin, they only do so with very small percentage of their total cash. Michael Saylor have explained the reasoning behind the decision in going all in with bitcoin. I do find them very convincing. He is very articulate in explaining all other investment options like real estate, precious metals, stocks, bonds, etc. After carefully analyzing them all, Saylor has come to a conclusion that bitcoin is the best wealth/value preservation asset. Time will tell if he made the most brilliant investment decision of the century, or the worst one.
But one thing is clear, that MicroStrategy's stock prices have benefited from their bitcoin strategy. Before MicroStrategy started buying bitcoin, their stock traded below $150, and maybe around $100. Today, their stock price is trading around $300. Even in crypto bear market their stock price is doing a lot better than before bitcoin investment. When bitcoin bitcoin was going up, MicroStrategy stocks were also trading at high prices like $600, $700, $800, etc. Not everything is about stocks, and I doubt the bitcoin strategy was about increasing the price of the company stocks. I believe it was the side effect of their bitcoin strategy. Initially, their goal was to find a good asset to invest with their unused cash.
Many companies would call such strategy crazy. When Apple CEO, Tim Cook was asked about bitcoin and wether Apple would consider to converting some of their cash into bitcoin. It is a good question, because Apple usually has a lot of cash sitting in their bank accounts. Tim Cook's response was, while he like bitcoin as a technology, they didn't want investors to be buying Apple stocks because of bitcoin, but rather because they believe in Apple as a company and products they make. This too is an example of good decision making. There is no one solution for all. On the other hand, MicroStrategy wanted/wants people to buy their stock because of bitcoin.
As Saylor explained in the past, many institutions can't invest in bitcoin directly due to the rules in place that prevent them from investing in certain categories. Especially with regulatory status of bitcoin still not being clear, many institutions would hesitate to consider such investment options. Because of this, companies who are heavily invested in bitcoin like MicroStrategy can provide exposure to bitcoin in form of their company stocks.
It has been clear for a while now that Michael Saylor has lost interest in running the company or anything that is not bitcoin. Even when he was asked if he would consider building some kind of applications or solutions that utilize bitcoin, he has expressed that he had no such intentions. It seems that he believes there is no need to do anything with bitcoin. His bitcoin philosophy seems to be simple as buy and forget.
He has played a great role in educating people, companies, and institution about the value proposition of bitcoin. He was even able to convince Elon to buy bitcoin with Tesla's cash, which they ended up selling some recently. I am sure many have been influenced by Saylor's bitcoin talks. He does love to talk about bitcoin. Now that he no longer have to deal with day to day business affairs of the company, he will have more time and focus on something he truly loves. I think it is a win for MicroStrategy, it is a win for Michael Saylor, and it is a win for bitcoin.
In the past Saylor mainly would focus on bitcoin and would try to avoid talking about other crypto assets. Just recently, when asked he ended up expressing his thoughts about other crypto assets, and specifically ethereum. He said ethereum is a security and was distributed unethically. That triggered Vitalik Buterin, who called Saylor a clown in one of his tweets. There is always some drama in crypto. While, Saylor tries to convince the world that bitcoin is the best money, I doubt anybody would be able to convince him that other crypto assets have value propositions as well. It is ok. He is is fully invested in bitcoin, and he needs to defend his position.
I am ok with him being bitcoin maximalist and keep educating the world about bitcoin. Crypto world is interconnected, and when bitcoin does well others tend to do ok as well. When bitcoins is in trouble, we see the interest for crypto in general starts fading away.