Michael Saylor: Microstrategy's real Bitcoin supporters

What do you do if you lead the stock corporation from outside the financial world with the greatest commitment to Bitcoin and just see almost $ 5 billion of your fictional profit?

If you are Michael Saylor from the US software company Microstrategy, sit firmly and continue to preach the gospel of crypto.

Saylor has led a number of television interviews this week to insist that his faith is steadfast. And in response to questions by email, he says that all good investors, whereby he refers to Warren Buffett and John Bogle, know that they shouldn't worry about short-term market fluctuations: "Every time horizon of less than four years will probably lead to a great result, a lot of frustration and uncertainty", and 10 years are even better.

"Bitcoin stands for the digital transformation of money, property, currency, energy and matter," he adds. It "is still in an early stage of development and is hardly understood".

If the 57-year-old software entrepreneur has succeeded in keeping surprising calm through a break-in in which Bitcoin has lost about 70 percent of his value since his all-time high last November, then this could have something to do with a personal story of market melting that is even more dramatic than those that have hit the cryptoma markets.

At the beginning of 2000, Microstrategy became the symbol of the last big tech boom and bus for a short moment. Its stock market value rose by leaps and bounds when Saylor announced a vision of how the growth of the data analysis company would be accelerated by the Internet before it fell back by more than 99 percent.

Saylor, who now refuses to use this experience, had to be more than 6 billion in a single day. An investigation by the Securities and Exchange Commission later led to a comparison in which he paid a fine and spit out profits of $ 8.3 million without admitting or denying misconduct.

Saylor's obvious Zen-like indifference in view of the Bitcoin extinguishing also indicates a rock-proof self-confidence that describes people who have followed him over the years as one of his characteristic properties.

"He is a visionary-he is not one who is worried about swimming against the current," says Dan Ives, a tech analyst who says he has known Saylor for more than 20 years.

Saylor decided in 2020 that the Federal Reserve's monetary policy would devalue the currency. He believed that the only reasonable answer was to invest his company's rest of his company in Bitcoin. By selling stocks, changeable securities, secure bonds and a secured loan, it collected about $ 3.4 billion, which increased the total purchases from Microstrategy to about $ 4 billion at ever higher prices

He gave no doubt about the cleverness of this step this week. The volatility on the market, he says, is due to the fact that crypto "crosses the abyss" because it is fighting the legitimacy of the establishment. There is "great rationalization that has to take place so that the industry can exploit its full potential".

Saylor, an Air Force-Gör who, among other things, made a degree in aviation at the Massachusetts Institute of Technology, had to give up his ambition to become a pilot for health reasons. Together with two friends, he founded Microstrategy two years after he started the computer industry, shortly before his 25th birthday.

In recent years, the company has been shadowed by waves of new cloud-based software companies, and its revenues decade 15 percent compared to the maximum of a decade ago. But sophisticated software companies are still throwing a lot of money, and Saylor's assets-the Forbes now estimated at $ 1.6 billion-has financed a life that has long been making him an object of fascination for the media in Washington, where Microstrategy is based. Several yachts, lavish parties and a manor house on the beach in Miami all contributed to the fact that in the two decades he remained between the two entanglements of Microstrategy with the market craze in the public eye.

For his fans, Saylor's waste of Bitcoin testifies to typical ingenuity. "He has proven to be forward-looking" when he warned that inflation would skyrocket and threaten the dollar reserves of American companies, says Mark Palmer von Btig, one of the few analysts on Wall Street, which follows MicroStrategy, which has a market capitalization of just over $ 2

Palmer adds that Saylor was also smart to use the era of free money to obtain cash to deep interest rates, which made it possible for him to buy a cheap option at the Bitcoin price-although the cryptocurrency still has to do justice to the supporters that it will be the ultimate value-plative in inflationary times.

For critics, however, there is no excuse for bad timing. Saylor pointed out by email that Bitcoin has still risen by 72 percent since the first purchase of his company in August 2020. He failed to notice that most of Microstrategy's purchases took place later and at much higher prices.

"He doubled at the top of the cryptom market," says Ives. "He put everything on red at the roulette table. It came out black."

At least at short notice, Saylor shows all the signs of being able to survive the storm. First of all, he is immune to counter -reactions from shareholders - although he only has 20 percent of Microstrategy's shares, he controls 68 percent of the votes through a special share genre.

It can also not be assumed that his company will become financial difficulties. Bitcoin fell through the $ 21,000 mark last week, in which Microstrategy has to store additional cryptocurrency as security in order to secure a secured loan this year. But about three quarters of his bitcoins, from a total of $ 2.7 billion, are still available for pledging as security, which gives him a large cushion to secure his loan. The first repayments on his debts are not due until 2025.

A longer crypto slump would be a problem. Bitcoin's price still has to recover by almost 50 percent, only so that Saylor's huge bet reaches the profit threshold. It is still time for another dramatic chapter in the changeable history of Microstrategy, whatever things will develop.