MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset
This is an episode of The Pomp Podcast with host Anthony "Pomp" Pompliano and guest, Michael Saylor, an entrepreneur and business executive, who co-founded and leads MicroStrategy, a company which provides business intelligence, mobile software, and cloud-based services. He has become well known in the Bitcoin community for using the company's ibalance sheet to purchase more than $400 million of Bitcoin.
In this conversation, we discuss how Michael built MicroStrategy, what his $500 million dilemma earlier this year was, and why he choose to put more than $400 million into Bitcoin with the company's balance sheet.
In this conversation, we discuss how Michael built MicroStrategy, what his $500 million dilemma earlier this year was, and why he choose to put more than $400 million into Bitcoin with the company's balance sheet.
Also thanks to @lucius, a nice article from Bloomberg, detailing a few interesting bits.
Firstly: Saylor is not a bitcoin zealot:
CEO Says Bitcoin Is Safer After Moving Firm’s Cash to Crypto
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Even so, Saylor said he’s not a crypto diehard. If bond yields jump, for instance, he said he won’t hesitate to dump the cryptocurrency, though he has no immediate plans to sell.
“We can liquidate it any day of the week, any hour of the day,”Saylor said. “If I needed to liquidate $200 million of Bitcoin, I believe I could do it on a Saturday. If I took a haircut, I believe it would be 2%.”
“We can liquidate it any day of the week, any hour of the day,”Saylor said. “If I needed to liquidate $200 million of Bitcoin, I believe I could do it on a Saturday. If I took a haircut, I believe it would be 2%.”
Well, we knew that, as for sure he elaborated some thought from 2013:
Another important bit of information, I was already aware of is settlement with the SEC:
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This isn’t the first time Saylor has garnered headlines. He lost billions in personal wealth after the shares tumbled when the company was accused by the U.S. Securities and Exchange Commission of overstating results. Saylor reached a settlement in 2000 without admitting or denying guilt.
More information here.
Micheal Saylor owns 67% of voting rights of MicroStrategy. Just remember that. When he says MicroStrategy decided to" he's actually saying "I decided to".
From their SEC Filing:
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Because of the rights of our two classes of common stock, and because we are controlled by our existing holders of class B common stock, these stockholders could transfer control of MicroStrategy to a third party without the approval of our Board of Directors or our other stockholders, prevent a third party from acquiring MicroStrategy, or limit your ability to influence corporate matters
We have two classes of common stock: class A common stock and class B common stock. Holders of our class A common stock generally have the same rights as holders of our class B common stock, except that holders of class A common stock have one vote per share while holders of class B common stock have ten votes per share. As of February 2, 2009, holders of our class B common stock owned 2,770,244 shares of class B common stock, or 75.2% of the total voting power. Michael J. Saylor, our Chairman, President and Chief Executive Officer, beneficially owned 399,800 shares of class A common stock and 2,429,582 shares of class B common stock, or 67.1% of the total voting power, as of February 2, 2009. Accordingly, Mr. Saylor is able to control MicroStrategy through his ability to determine the outcome of elections of our directors, amend our certificate of incorporation and by-laws and take other actions requiring the vote or consent of stockholders, including mergers, going-private transactions and other extraordinary transactions and their terms.
Source: We have two classes of common stock: class A common stock and class B common stock. Holders of our class A common stock generally have the same rights as holders of our class B common stock, except that holders of class A common stock have one vote per share while holders of class B common stock have ten votes per share. As of February 2, 2009, holders of our class B common stock owned 2,770,244 shares of class B common stock, or 75.2% of the total voting power. Michael J. Saylor, our Chairman, President and Chief Executive Officer, beneficially owned 399,800 shares of class A common stock and 2,429,582 shares of class B common stock, or 67.1% of the total voting power, as of February 2, 2009. Accordingly, Mr. Saylor is able to control MicroStrategy through his ability to determine the outcome of elections of our directors, amend our certificate of incorporation and by-laws and take other actions requiring the vote or consent of stockholders, including mergers, going-private transactions and other extraordinary transactions and their terms.
https://ir.microstrategy.com/node/17726/html
Recapping with a simple image:
Saylor controls 67.1% of the voting capital of the company. Hence he can dictate everything in the company.
Of course this can be viewed as a call to stability and focus on business, as they stated in some interviews, but this is actually relevant information not to be ignored while reading the statements in the first paragraph.
Also worth Noticing Salyor himself owns many bitcoins.
https://twitter.com/michael_saylor/status/1321422012380753921?s=20
Again, the point he informed the managers, is laughable.