Who is Michael Saylor?
Michael Saylor is an entrepreneur, founder and CEO of MicroStrategy, a business intelligence platform developer based in the United States, until 2022. What is his background? Let’s take a look together!
In the summer of 2020, MicroStrategy became the first publicly traded company on the Nasdaq exchange to invest in bitcoin. MicroStrategy owned nearly 130,000 BTC as of early September 2022.
Saylor devised this strategy. He claims that bitcoin is a reserve and investment asset that allows businesses to protect their capital from the risks of fiat money inflation.
Saylor resigned as MicroStrategy’s CEO in early August, citing record losses caused by the bitcoin price drop. He has, however, remained with the company and intends to focus on its financial strategy.
Early years and the MicroStrategy foundation
Saylor was born in 1965 in Lincoln, Nebraska. He graduated from the Massachusetts Institute of Technology (MIT) in 1987. At the same time, he began working at the consulting firm The Federal Group, where he was involved in computer simulation modeling. He relocated to DuPont in 1988.
Saylor co-founded Microstrategy, an IT company, with another MIT graduate, Sanju Bansal, in 1989, and served as CEO until 2022.
The company’s first major client was McDonald’s Corporation, with which it signed a contract in 1992.
In 1998 MicroStrategy successfully conducted an initial public offering (IPO).
The company soon founded Alarm.com, which provides services for remote appliance management and monitoring systems. In 2009, the startup was sold to ABS Capital Partners, a venture capital fund.
Saylor’s fortune was estimated to be $7 billion by the Washingtonian in 2000.
In the spring of that year, the SEC charged Saylor and two other top MicroStrategy executives with falsifying the company’s financial report for the previous two years. He eventually settled with the SEC by paying a fine, but pleaded not guilty.
MicroStrategy’s main product is still a business intelligence platform for corporate clients.
Why did MicroStrategy start to buy bitcoins?
MicroStrategy, which had a market capitalization of approximately $1.3 billion, abruptly announced the acquisition of approximately 21,454 BTC worth approximately $250 million in August 2020. It was the first publicly traded company on the Nasdaq exchange to float capital in bitcoin.
MicroStrategy has since made a number of other bitcoin acquisitions. According to the Bitcoin Treasuries website as of March 2022, the company owns nearly 132,500 BTC worth over $2.5 billion. Saylor, on the other hand, continues to actively promote the idea of storing corporate capital in cryptocurrency in the public space.
How does Michael Saylor explain the benefits of bitcoin for businesses and investors?
The founder of MicroStrategy explained his motivation for purchasing bitcoin by citing the high risks of inflation in the United States, which could result in a rapid depreciation of savings denominated in US dollars.
Later, he argued that his company’s bitcoin investments were not speculative, but rather a long-term strategy, and he promised to hold the first cryptocurrency for 100 years.
The financial market expanded significantly in 2020–2021 as a result of massive stimulus programs implemented by Western governments. Some analysts have compared investing in bitcoin and other cryptocurrencies to investing in high-risk assets. According to Saylor, however, bitcoin purchases by institutional investors are driven more by a desire to protect against the risks of fiat currency depreciation.
In the fall of 2020, Saylor stated that others, primarily private enterprises, would soon move their savings into bitcoin, and MicroStrategy’s CFO later stated that keeping their savings in the first cryptocurrency is the “responsibility” of every tech company.
Saylor emphasizes that bitcoin is not a direct substitute for fiat money, but rather a valuable asset that should not be traded. He also refers to the first cryptocurrency as a new reserve asset.
According to the founder of MicroStrategy, another reason for businesses to keep bitcoin is its long-term investment appeal. Saylor is confident that the return on bitcoin purchases will eventually outperform the return on early investments in Apple, Amazon, Google, Facebook, and other leading technology firms.
MicroStrategy CEO resigns and is accused of tax evasion
In early August 2022, Michael Saylor announced that he was stepping down as CEO of the company he founded. Fong Le will take over in his stead. Saylor, on the other hand, will take over as “executive chairman” and focus on financial strategy, specifically on additional bitcoin acquisitions.
Simultaneously, MicroStrategy released its financial report for the second quarter of 2022, revealing that the company spent more than $1 billion on revenue of $122 million. The loss was 96.5% higher than in the same period in 2021, owing primarily to a drop in the value of bitcoin and other cryptocurrencies.
Saylor described these results as “temporary,” noting that bitcoin has surpassed the stock market in terms of growth. He claimed that if MicroStrategy had kept its capital in dollars, it would have lost 20% of its purchasing power every year.
Less than a month later, authorities in the federal District of Columbia, which includes Washington, D.C., charged a businessman with approximately $25 million in tax evasion.
According to local prosecutors, Saylor had been living in a D.C. city since 2005 while “masquerading” as a resident of states with low tax rates, particularly Florida or Virginia. According to the prosecution, Saylor, among other things, purchased real estate in those states and registered to vote there.
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