Michael Saylor has lost around $1 billion on his bitcoin (BTC) gamble and has just stepped down as CEO of MicroStrategy (MSTR), the software company he founded in the 1980s.
Being in a bind is familiar territory for Saylor, 57. After the dot-com bubble burst in March 2000, CNBC anchor Jim Cramer pointed to the collapse of MicroStrategy as a catalyst. Shares had fallen 62% in a single day after MicroStrategy announced accounting errors, wiping $6 billion from Saylor’s wealth and marking a prominent end to the high-flying days of the Internet’s early days. Later that year, the US Securities and Exchange Commission filed, and later settled, accounting charges against MicroStrategy, Saylor, and other company executives.
Saylor and MicroStrategy spent two decades mostly under Wall Street’s radar. Not that he was suffering. MicroStrategy kept moving forward, developing software for businesses. Saylor lived in a Miami Beach, Florida, mansion that looks like a Spanish colonial palace. A recent visit by a CoinDesk reporter revealed painted cherubs on the lobby ceiling, gilt paneling and crimson wallpaper in the dining room, a stage beyond the office library with guitars, drums and anything other than a band. may need, and a portrait of Saylor in the style of an old English sailor, with laser eyes. A yacht floated out back, where a crew lived full time so Saylor could travel whenever he wanted.
What brought Saylor back to center stage was bitcoin. His fear of inflation led him in 2020 to start investing MicroStrategy cash in the original cryptocurrency. The company’s cash flows began to be routed to bitcoin. He lined the pockets of Wall Street bankers by selling debt to raise money to buy bitcoins. In the process, he boldly turned his sleepy software company into a bitcoin vault. In total, MicroStrategy has spent around $4 billion on digital assets. MicroStrategy stock became a proxy for holding bitcoin. The stock price rises and falls at the same rate as bitcoin moves.
He became something of a bitcoin preacher spouting religiously fervent praise. His grandiose predictions included one that bitcoin will eventually be worth $100 trillion, roughly what all the stocks in the world are collectively worth now.
“After scientifically studying everything on Earth, I have come to the conclusion that Bitcoin is the best hedge against inflation,” he told CoinDesk during a November interview at the Miami Beach mansion. “We buy bitcoins as fast as we can with whatever money we find lying around.” Was your advice of him as bitcoin close to his record? “If you have bitcoin, don’t sell it. If you don’t have bitcoin, buy it. And if your bitcoin is moving, wait.”
Fast forward to today. MicroStrategy shares have lost about two-thirds of their value since peaking last year, dragged down by the ongoing bitcoin bear market. Saylor this week handed over the title of CEO to Phong Le, who had been chairman of MicroStrategy, and moved into the role of executive chairman, pledging to put his full focus on bitcoin investing. He now runs the legacy software business.
Saylor was not immediately available for an interview for this story.
So who is Michael Saylor?
Born in Lincoln, Neb., to a military family, Saylor grew up around bases. That included Wright-Patterson Air Force Base near Dayton, Ohio. He attended the Massachusetts Institute of Technology on an Air Force scholarship and became a second lieutenant in the Air Force.
He launched MicroStrategy in his early 20s after convincing his employer, DuPont (DD), to give him $100,000 and free office space and computer equipment, Saylor told Charlie Rose during an interview in February 2000. Saylor’s extravagance was visible back then, offering a glimpse of what was to come with bitcoin.
“I think in the next decade you’ll see people using software to route traffic on all major highways,” he told Rose 22 years ago. “We are going to use it to determine which hospital we go to or which medication we take. We are going to use it to arbitrage all interest rate differentials in the financial market and get a better deal from our bank and probably a better deal in the stock market.”
But he also immediately noted the serious potential downsides of the technology, about a month before its stock plummeted. “If the software fails, civilization comes to a complete halt in the same way that if you shut down air traffic control at a major airport, traffic will come to a complete halt,” Saylor told Rose, adding, “And that’s what exciting. about technology.”
Darin Feinstein, co-founder of the Bitcoin Mining Council, knows Saylor because the MicroStrategy executive helped form the advocacy group in May 2021.
“He’s an entrepreneurial genius,” Feinstein said in an interview after Saylor’s job change. “He says something and he already knows what you’re going to say,” Feinstein said, when asked how Saylor is doing during meetings. “He operates on a completely different level.”
After he stepped down as CEO of MicroStrategy, some observers initially speculated that the bitcoin buyout was over. They quickly learned that this is not the case. Saylor intends to dig even deeper now that he’s CEO.
“In my next job, I intend to focus more on bitcoin”, Saylor tweeted early Wednesday.
READ MORE: Michael Saylor is the Cyber Hornet of Bitcoin
Aoyon Ashraf contributed reporting to this story.