Last Friday MicroStrategy paid off its loan to Silvergate Bank at 20% discount. They borrowed $205 million last year, only had to pay back $161 million. Interesting thing is they have raised about $340 million by selling company stocks to pay back the loan. What do they do with the remaining money? They bought 6,455 more bitcoins. Why? Because bitcoin is magical and nobody is as obsessed about bitcoin as Michael Saylor.
Now MicroStrategy holds about 138,955 bitcoins. Impressive! This doesn't even include 17,000 bitcoins that Michael Saylor personally owns. Prices go up, prices go down - Saylor continues to accumulate the money of the century. Saylor no longer is the CEO of MicroStrategy, he resigned from that position about eight months ago. But he still plays a decision making role in the company as an executive Chairman.
When Michael Saylor transitioned into Chairman role and gave up his CEO position, it was clear at that time that he no longer wanted to be distracted from the day to day operations of the core MicroStrategy business. He focus has fully shifted to bitcoin and bitcoin strategy of the company. Some criticize him for turning the company into a bitcoin business, instead of focusing at what they are good at. Time will tell if/when this bitcoin strategy plays out successfully.
I have a lot of respect for Michael Saylor as a businessman, and a bitcoin advocate. Unlike many others who try to promote one product or other, Michael Saylor has been truthful and honest about his vision regarding bitcoin. He articulates better than anybody the reasons why bitcoin is revolutionary and one of the best investments anybody could make in this century. He doesn't sell something he is not buying himself, and it seems he is willing to do so at any price as long as he has some cash. That is a real conviction. Not everybody can do that. Just like any investment, bitcoin is not completely risk free.
This strategy may work for big companies and wealthy individuals with a lot of cash. Even though they are investing almost everything they have, that is still almost everything. They have basic life needs taken care of and more. They don't have to worry about mortgage or rent payments, they don't have to worry about grocery shopping expense, raising children, and supporting families. They are all taken care of. This is not the case for the ordinary people. Regular people can't just go all in on an investment, and disregard everything else. Life is expensive.
However, continuous and fearless accumulation of bitcoins by Saylor and MicroStrategy is inspiring. I believe everybody should have some bitcoin or satoshis in their wallets, but only with the money that is not needed for daily expenses. Money in savings is best kept as bitcoin, hive or hbd. Not a financial advice.
Since Saylor entered into bitcoin space, he has played a great role in educating people, companies, and institutions about the value proposition of bitcoin. He has become an influential speaker for bitcoin and he does it well. His experience in business space and academia does bring a lot of credibility to this speeches, interviews, and thoughts. Still most impactful and powerful thing he has done is buying more and more bitcoins. It is obvious to everybody that he doesn't just talk bitcoin, but also walks bitcoin.
He is also criticized about being bitcoin maximalist, as he doesn't see similar value in other crypto projects. He explains his reasons well. However, the main reason that nobody should expect him to be anything less than bitcoin maximalist, is the amount he and has company has invested in bitcoin. Not only they have all cash they have on bitcoin, but also took out huge loans to buy more. I am sure he has competent financial, accounting, and legal professionals who consider all possible risks when they make such financial decisions for the company. So far it seems his strategy is working well and I hope it will become one of the most successful investments and business strategies.
One question some may ask is - Why would a company need so many bitcoins? 100k bitcoin is already a lot and should be more than enough for any one company. Especially because bitcoin is decentralized and total possible coins is limited to only 21 million (even less considering all the lost coins). The scarcity of the asset and its decentralized nature is precisely why I believe they continue buying. Because they understand companies, institutions, and even counties sooner or later will discover the potential of this money. As time goes by acquiring more bitcoins will become more difficult.
Although Saylor's intentions are to never sell their bitcoins, at some point they will have to take profits at least to cover the loans. Perhaps it won't happen anytime soon as long as Saylor in charge of this sailing ship.