Michael Saylor Lost Big in the Dot-Com Bubble and Bitcoin’s Crash. Now He Aims to Rebound Again

Michael Saylor Lost Big in the Dot-Com Bubble and Bitcoin's Crash. Now He Aims to Rebound Again

Michael Saylor is down about a Billions of dollars on his bitcoin (BTC) bet and has just resigned as CEO of MicroStrategy (MSTR), the software company he founded in the 1980s.

Being in a sticky situation is familiar territory for Saylor, 57. After the dot-com bubble burst in March 2000, CNBC host Jim Cramer sharp to the collapse of MicroStrategy as a catalyst. The the stock had fallen 62% in a single day after MicroStrategy announced accounting errors, wiping out $6 billion of Saylor’s wealth and marking a dramatic end to the high-flying days of the early Internet. Later that year, the United States Securities and Exchange Commission brought, then settledaccounting charges against MicroStrategy, Saylor and other company executives.

Saylor and MicroStrategy then spent two decades mostly under Wall Street’s radar. Not that he was in pain. MicroStrategy kept plugging away, 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, gold panels and crimson red wallpaper in the dining room, a stage beyond the office library filled with guitars, drums and everything what a group might need, and a Saylor-style portrait as an old English sailor – complete with laser eyes. A yacht floated aft, where a crew lived full-time so Saylor could travel whenever he wanted.

What brought Saylor back into the limelight was bitcoin. His fear of inflation drove it in 2020 to start investing MicroStrategy’s money in the original cryptocurrency. The company’s cash flow began flowing into bitcoin. He wall street bankers lined pockets by selling debt to raise funds to buy bitcoin. In the process, he boldly turned his sleepy software company into a Bitcoin vault. In total, MicroStrategy has spent approximately $4 billion on digital assets. MicroStrategy shares have become a proxy for holding bitcoins. The stock price goes up and down as bitcoin moves.

He has become something like a bitcoin preacher spouting religiously fervent praise. His grandiose predictions included the one that bitcoin will eventually be worth 100 trillion dollarsroughly what all the stocks in the world collectively worth now.

“After scientifically studying everything on Earth, I’ve 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 bitcoin as fast as we can with the money we find lying around.” His advice when bitcoin was close to its all-time high? “If you have bitcoin, don’t sell it. If you don’t have bitcoin, buy it. And if your bitcoin moves, wait.

Fast forward to today. MicroStrategy’s stock has lost about two-thirds of its value since last year’s high, dragged down by the current bitcoin bear market. This week, Saylor handed over the CEO title to Phong Le, who had served as chairman of MicroStrategy, and moved up to executive chairman, pledging to focus entirely on bitcoin investing. Le 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., into a military family, Saylor grew up around the bases. This included Wright-Patterson Air Force Base near Dayton, Ohio. He attended the Massachusetts Institute of Technology on an Air Force scholarship and became a air force second lieutenant.

He started 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 a interview in February 2000. Saylor’s quirk was visible at the time, offering a glimpse of what was to come with bitcoin.

“I think you’re going to see over the next decade that people are going to use software to route traffic on all major highways,” he told Rose 22 years ago. “We’re going to use it to figure out what hospital we go to or what medicine we take. We’re going to use it to arbitrate all the interest rate spreads in the financial market and get a better deal from our bank and probably a better transaction in the stock market.

But he immediately noted the serious potential downsides of the technology, about a month before his stock plunged. “If the software crashes, civilization comes to a screeching halt the same way that if you shut down air traffic control at a major airport, traffic will come to a screeching halt,” Saylor told Rose, adding, “And that’s what’s 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 a genius entrepreneur,” Feinstein said in an interview after Saylor’s job change. “You say something and he already knows what you’re going to say,” Feinstein said, when asked how Saylor was doing during the meetings. “It operates on a completely different level.”

After his resignation as CEO of MicroStrategy, some observers initially speculated that the bitcoin buying was over. They quickly realized that was not the case. Saylor intends to go even further now that he is executive chairman.

“In my next job, I plan to focus more on bitcoin,” Saylor tweeted early Wednesday.

READ MORE: Michael Saylor is Bitcoin’s cyber hornet

Aoyon Ashraf contributed reporting for this story.

Leave a Reply

Your email address will not be published.