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If you know about Bitcoin, you've probably heard of Michael Saylor.

The MicroStrategy CEO has become a cult hero in the crypto space.

An ardent believer in Bitcoin, he was the first to put it on a company balance sheet.

Then Saylor encouraged Elon Musk to do the same in an iconic Twitter conversation...




The rest is history...



The MicroStrategy stock price quadrupled in less than two months...

Then Saylor went on CNN explaining why EVERY responsible CEO should be buying Bitcoin...



Even as he was hailed as a visionary, some investors got cold feet, cashed out and the stock price started to fall...

Turns out large exposure to a volatile asset isn't great for investor confidence.


Peak mania?

Not deterred, he's doubling down and continues to leverage the company balance sheet into a Bitcoin purchasing vehicle.


MicroStrategy Completes $500 Million Offering of 6.125% Senior Secured Notes Due 2028 with Bitcoin Use of Proceeds
June 14, 2021

As of June 21, 2021, MicroStrategy holds an aggregate of approximately 105,085 bitcoins, which were acquired at an aggregate purchase price of approximately $2.741 billion and an average purchase price of approximately $26,080 per bitcoin, inclusive of fees and expenses. MacroStrategy LLC, a subsidiary of MicroStrategy, holds approximately 92,079 of the bitcoins.

And if that's not enough, more cash is being set aside...


MicroStrategy Files to Sell as Much as $1 Billion in Shares
MicroStrategy Inc. filed a “shelf” registration with the U.S. Securities and Exchange Commission to sell as much as $1 billion in common shares for general purposes, including the purchase of more Bitcoin.

Saylor is VERY clear on the future of Bitcoin...


Once you know how it all ends, the only use of time is… how do I buy more bitcoin?
Take all your money and buy bitcoin.
Then take all your time, figure out how to borrow more money to buy more bitcoin.
Then take all your time and figure out what you can sell to buy bitcoin.
And if you absolutely love the thing, that you don’t want to sell it, go mortgage your house and buy bitcoin with it.
And if you’ve got a business that you love because your family works for the business and it’s in your family for 37 years, and you can’t bear to sell it, mortgage it, finance it, and convert the proceeds into the hardest money on earth, which is bitcoin.

But does he really know how it all ends...?

Has he got a decent track record of predicting the future?



You see, Michael's been here before.

Back in 2000, MicroStrategy was a pretty big deal.

Things were going so well that they even purchased advertising slots for the 2000 superbowl...  


"The Power Of Intelligent E-Business"

Then it all started to go terribly wrong.

Turns out MicroStrategy had made a few accounting errors and were forced to 'restate' their accounts.


The stock and the Nasdaq stock market peaked on the same day, March 10, 2000.
The next day MicroStrategy admitted its glorious growth record was fiction, created by accounting practices that the Securities and Exchange Commission later determined to be fraudulent.
When MicroStrategy stock tanked -- wiping out more than $6 billion of Saylor's paper wealth in 6 1/2 hours of trading -- it took the Nasdaq market down with it. The bubble reinflated a bit, but it never recovered from being pricked by Saylor.
MicroStrategy was both a victim and a cause of the tech stock collapse.

Is this just another case of history repeating?

The four dangerous words spring to mind again...


"This time it's different"

Bring in the detectives, and let's see if there are any lessons from history...

2002:


The reality of MicroStrategy is that it was never anything but a third-tier software company, an outfit with a reputation and a stock price bloated by the bubble market in tech stocks.
MicroStrategy was no Microsoft, no Oracle, though Saylor fancied it one.

Not much has changed on that front.

Definitely not one of the big-hitters, but brings in respectable annual revenues of ~$500 million.

What about the man himself... has he changed?

Perhaps more importantly, have lessons been learnt?

To try and answer that, I've been digging through old coverage for quotes and comments from the early 2000s. I found two good profiles:  

The 'Vision' Is Distorted From Inside the Tech Bubble (Washington Post: Jan 2002)

Confessions From A Crash (Newsweek: June 2001)

His character really stands out...

Keep in mind that these profiles and quotes came after the stock price crashed and SEC took action for accounting fraud...


How Saylor turned what was once a $313-a-share stock and the biggest fortune in Washington into a $4.09 stock and a merely moderate number of millions is an amazing tale of hubris, hyperbole and high-tech hallucinations.
Did he have any premonition that he was guilty of hubris? No, he says.
Saylor has always said that what made MicroStrategy different was him.
He was "a visionary."
"I'm still a visionary" he told Leibovich. "I'm a bit more mature, maybe an older, wiser visionary."

By now, of course, he's an even older, even wiser visionary...

He already knows how it all ends 👇👇


Once you know how it all ends, the only use of time is… how do I buy more bitcoin?

Back to 2001/2...


What makes Saylor so dangerous to investors is that he is sincere.
Though he was cited for fraud by the SEC, Saylor is not a con man.
He genuinely believes in his vision, his own version of reality.

And he has a far larger audience to share it with now...

Does he have any regrets over what happened?


Saylor envies other dot-com entrepreneurs who "jumped through the window" to the "pot of gold" before the window slammed shut
Indeed, he insists that "but for a technicality"--the restatement from his accountant--"we would have won." Saylor cannot help but blame bad luck--"a fluke."

Such bad luck...

The only mistake he admits to?


"I made the mistake of being passionate and idealistic. ... That was my sin"

When asked if he would do it all again and take another shot...


"Yeah, but I would probably manage the risk better."

If turning your software company into a highly-leveraged levered Bitcoin vehicle is better risk management, you have to wonder what really went on in 2000...

So, that's the picture.

It really doesn't look like any lessons have been learnt, the same mistakes are being repeated, the personality traits are the same, and the outcome probably will be too...

Want to dive deeper into the financial implications for the company?

Look no further... 👇




A Drunken Saylor
“Once you know how it all ends, the only use of time is…how do I buy more bitcoin? But take all your money and buy bitcoin. Then take all your time, figure out how to borrow more money to buy more bitcoin. Then take all your time and figure out what you can sell to buy bitcoin. And if you absolutely…

Now, it's important to distinguish between Saylor's vision and the future of Bitcoin.

Saylor claims to know how it all ends...

I'm far more humble.

For me, Bitcoin is lacking a fresh narrative to really push higher.

People need something new to believe in (or something to happen that gives new life to existing narratives)

Energy has potential, as does wider Bitcoin adoption on Wall Street.

However, JP Morgan ran a survey recently and found that one in three investors believed crypto was 'rat poison' with 95% believing that fraud is somewhat or very much prevalent in the crypto world.

81% expect tighter regulations of crypto in the future.

Will MicroStrategy still be around once those regulations are formalised?

I wouldn't bet on it...

"Those who cannot remember the past are condemned to repeat it..."