When cryptocurrency prices were plummeting in June, sending billions of dollars up in smoke, one of bitcoin’s noisiest evangelists vowed he would “continue to HODL” – hold on for dear life – “through adversity”. A noble sentiment, perhaps. But arguably Michael Saylor had little choice.
Having strapped his data analytics company MicroStrategy – founded in 1989, and his lifetime’s work – to an “all-or-nothing” bet on bitcoin, his only recourse was to continue bigging up the currency. Saylor is so convinced he can turn his investment into a “bonanza” that MicroStrategy is ploughing “almost every cent it can find into bitcoin”, reported The Information in February this year, when the price had already halved from its $68,000 November peak.
At that point, the company’s total bitcoin holding amounted to $3.77bn – “about 20 times the cash MicroStrategy’s software business generated over the past three years”. When Saylor doubled down on the falling price, borrowing $205m more to invest in bitcoin – in a loan backed by MicroStrategy’s existing holdings – the move was viewed as “a trifle risky”. Question: what is today’s best definition of a gambler? ran the joke. Answer: someone who buys shares in MicroStrategy. Between April and May, the outfit’s shares plunged by more than 60%.
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Keeping calm in the storm
This isn’t the first time one of Saylor’s “mega-bets” has gone “underwater”, says Forbes. Indeed, his extraordinary calm in the teeth of a 70% bitcoin bust could be attributed to “a personal history of market meltdowns even more dramatic than the one that has hit crypto markets”, says the Financial Times. “For a brief moment in 2000, MicroStrategy became emblematic of the last great tech boom and bust.” Its market value leapt as investors bought Saylor’s vision of how data analytics would be supercharged by the internet, before slumping 99%.
Saylor saw “more than $6bn wiped from his personal wealth in a single day in March 2000” when the company restated its accounts. He still “refuses to be drawn on that experience” and an investigation by the Securities and Exchange Commission was later settled: Saylor paid a fine without admitting wrongdoing.
Saylor, 57, has always been a man for whom “the sky was the limit”, says the South China Morning Post. Born in Nebraska in 1965, into an air force family, he spent his childhood moving between US air bases around the world – later studying aeronautics and astronautics at MIT. Forced to abandon his ambition to become a pilot for health reasons, he co-founded MicroStrategy two years out of college at the age of 24. Business data analysis proved lucrative, but perhaps even Saylor was taken aback when tech mania took hold in the 1990s.
Saylor made no bones about enjoying his wealth, says the FT. “Multiple yachts, lavish parties and a beachfront mansion in Miami” all kept him in the public eye in the two decades between two bouts of “market mania.”
In bitcoin we trust
Opinion is firmly split on Saylor. Analysts castigate his timing and foolhardiness (“He bet it all on red at the roulette table. It came up black,” says tech analyst Dan Ives). Others highlight his selfish gamble with the livelihoods of others. “It’s important to keep reminding yourself that MicroStrategy is an actual company, employing approximately 2,100 people,” says the FT’s Bryce Elder.
“Their opinions are free to read on Glassdoor.” Yet Saylor retains a following among those who hail him as a visionary and, at least in the short term, shows every sign of being able to ride out the storm – aided by a recovering bitcoin price. Saylor, having “chosen monotone mystical obstinacy as a personality”, is unrepentant, says Elder. But he has made one concession – handing over the formal CEO role to a lieutenant. It may not make much difference, says CoinTelegraph.
Saylor continues as executive chairman and has said that splitting the roles will help the firm continue to pursue its bitcoin strategy. Still, investors seem to like what they hear: shares have jumped by more than 48% in a month. “In #Bitcoin We Trust”, tweeted Saylor in June. It’s still a rallying cry.
Jane writes profiles for MoneyWeek and is city editor of The Week. A former British Society of Magazine Editors editor of the year, she cut her teeth in journalism editing The Daily Telegraph’s Letters page and writing gossip for the London Evening Standard – while contributing to a kaleidoscopic range of business magazines including Personnel Today, Edge, Microscope, Computing, PC Business World, and Business & Finance.
She has edited corporate publications for accountants BDO, business psychologists YSC Consulting, and the law firm Stephenson Harwood – also enjoying a stint as a researcher for the due diligence department of a global risk advisory firm.
Her sole book to date, Stay or Go? (2016), rehearsed the arguments on both sides of the EU referendum.
She lives in north London, has a degree in modern history from Trinity College, Oxford, and is currently learning to play the drums.
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