CEO Says MicroStrategy Will Never Sell Bitcoin Stash
A recent 40% slide in the cryptocurrency’s value means “this is a great entry point for institutional investors,” according to Saylor.
Even after bitcoin’s recent 40 percent slide, Michael Saylor says he’ll never back down on pushing MicroStrategy Inc.’s multibillion bet on the world’s largest cryptocurrency.
The enterprise software company’s growing pile of bitcoin has effectively made its share price a proxy for the digital asset. Yet founder and CEO Saylor remains sanguine when asked if he is tempted to sell in the face of what could be an extended bear market.
“Never. No. We’re not sellers,” the 56-year-old told Emily Chang on Bloomberg Studio 1.0, heeding to the popular “hodl,” or hold on for dear life, mantra. “We’re only acquiring and holding bitcoin, right? That’s our strategy.”
Saylor shot the lights out in the summer of 2020 when the company—based in Tysons Corner, Virginia—first announced its cash management plan centered around buying bitcoin. The company’s stock gained more than 900 percent at one point. But its aggressive stance in continuing to add to its roughly $5 billion bitcoin stockpile—tapping equity-linked and debt markets to fund the habit—has shown diminishing rewards as of late.
Shares of MicroStrategy have underperformed bitcoin during its selloff, as risk appetite wanes. Additionally, the average listed price announced for every bitcoin purchase since late February has been above current trading levels. However, MicroStrategy’s stake—roughly 124,391 bitcoins through the end of December, according to filings—remains in the black due to early acquisitions.
Saylor said bitcoin’s slide from nearly $69,000 in November to less than $40,000 this month doesn’t make him nervous about his holdings. In fact, they are a source of “great comfort,” considering rising inflation, he said.
“The best defense against inflation is a bitcoin standard. So I don’t really think we could do anything better to position our company in an inflationary environment than to convert our balance sheet to bitcoin,” he said.
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Saylor was motivated to adopt a bitcoin strategy as an alternative to stock buybacks and acquisitions in the face of inflation eroding the value of the company’s cash. The idea turned him into an overnight crypto celebrity, with the likes of Elon Musk following suit and adding bitcoin to Tesla Inc.’s balance sheet. Yet money managers continue to debate the merits of the digital asset as a hedge against inflation due to the lack of historical data.
“I had a sense of the consequences if we did nothing, because I had seen the demise of 99 percent of my competitors, and I could see where we were headed if we stuck with the status quo,” Saylor said. “We would have to either adopt a bitcoin strategy or sell the company. And we elected to pursue bitcoin.”
MicroStrategy’s stash of bitcoins already exceeds the market value of the company, whose core business helps customers like Target Corp. make decisions including how much product to put on shelves. Yet Saylor remains committed to buying more coins as the company generates cash, and he sees more Wall Street bigwigs joining at current prices.
“I feel like it’s consolidating at this level,” said Saylor, someone who’s touted bitcoin as a buy from $11,000 to $59,000. “This is a great entry point for institutional investors.”
—With assistance from Tom Contiliano & Paula Seligson.
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