Looking back at Michael Saylor’s life trajectory, it is not difficult to find that all in has always been the footnote of his life.
Original title: “Bitcoin Crazy Gambler, Michael Saylor’s ALL IN Philosophy”
Written by: Hegel
Because of the crazy purchases of Bitcoin in the past two years, Michael Saylor has become a veritable “big gambler” in the cryptocurrency field.
At present, MicroStrategy (stock code MSTR) holds a total of 105,000 bitcoins, accounting for 0.5% of the total bitcoin supply, ranking first among listed companies in the world.
Others use Bitcoin to diversify asset allocation and fight inflation, while Thaler is like using Bitcoin to gamble on the future of companies and individuals.
From MIT graduates, to CEOs of listed companies, to today’s bitcoin bulls, if you look back at Thaler’s life trajectory, it is not difficult to find that all in has always been the footnote of his life.
Listed company holding 100,000 BTC
If you look at the financial report, you will find that by Q1 2021, the total assets of micro-strategies will be US$2.443 billion, of which US$1.946 billion will come from digital assets. On the cash flow statement, the company spent US$1.086 billion in the first three months of this year, of which only US$447,000 was used to purchase fixed assets and other “real assets”, which means that 99.96% of the money spent was used to buy Bitcoin. .
This also made the veteran staff of MicroStrategy very upset. It was originally a business intelligence software company, but now the investment in BI software research and development is only 29.482 million US dollars, which is not even a fraction of the money to buy Bitcoin.
“Bitcoin is a weird thing. Employees like us feel that the company is a bit unsuccessful.” An employee said on the job site Glassdoor (similar to “Kanzhun”).
Micro Strategy 2021 Q1 Cash Flow Statement
At the July 2020 quarterly meeting, Saylor announced that MicroStrategy plans to purchase bitcoin, gold and other alternative assets to replace the cash still held on the balance sheet.
One month later, Microstrategy bought 21,454 bitcoins with 250 million US dollars in cash in stock.
In September and December 2020, Micro Strategy spent another 175 million and 50 million U.S. dollars to buy Bitcoin.
The company’s $500 million in cash has been spent to buy such a bit of Bitcoin? Maybe it is not enough. Thus, a dramatic scene in the history of securities appeared:
On December 11, 2020, MicroStrategy issued US$650 million in convertible bonds, all of which were used to buy Bitcoin.
It is recognized in the industry that Thaler has created two firsts: Let MicroStrategy become the first listed company in history to buy Bitcoin and incorporate it into its capital allocation strategy; and it is the first company that dares to borrow other people’s money to buy Bitcoin.
Of course, borrowing money to buy coins is very courageous, and the scolding is not small. Citi analysts have repeatedly issued negative reviews. After MicroStrategy really announced the issuance of convertible bonds, they directly downgraded its rating from “neutral” to “recommended sell.”
What’s interesting is that the stock price of micro-strategy has not fallen; on the contrary, with the issuance of convertible bonds, the stock has started a new round of rising cycle.
On February 9 this year, due to the very popular activities of Micro Strategy World 2021, the stock price of Micro Strategy rose to an all-time high, closing at $1272.94. A few days later, investment sentiment fell, but it remained above US$900.
Micro-strategy stock price changes in the past year (Source: Nasdaq official website)
At that time, the ten-year old employee was very proud and flaunted on social media: “Look! Our boss was selected as the most influential person in the currency circle in 2020! Our company now holds more than 70,000 Bitcoins. Yeah!”
The micro-strategy’s purchase of Bitcoin in Q1 of 2021 shows that Celedo increased the position when the price of Bitcoin fell (Source: Coinsmart.com)
Traditional financial institutions disagree with the freak of micro-strategy. Standard & Poor’s Global Ratings Corporation rated the issuer’s credit rating of the micro-strategy as “CCC+”, which is lower than “investment grade.” HSBC simply prohibits customers from buying micro-strategy stocks, saying that HSBC has no interest in this “virtual currency”.
However, the market’s enthusiasm for micro-strategies is very high. On June 14 this year, MicroStrategy announced the completion of the issuance of secured senior notes with a total value of US$500 million. The market is extremely popular with this bond, and the demand for orders is as high as $1.6 billion.
After receiving the money, on June 21, Wei Strategy purchased 13,005 bitcoins again. So far, MicroStrategy holds a total of 105,085 bitcoins, accounting for 0.5% of the total bitcoin supply, ranking first among listed companies in the world.
Calculating the cost, the micro strategy spent a total of US$2.741 billion, with an average holding cost of US$26,080. Among them, 92,000 bitcoins are handed over to the subsidiary “MacroStrategy” (MacroStrategy) management.
It can be said that the micro strategy is betting on Bitcoin. It puts all its hopes on the value-added of Bitcoin, and its own business has made little progress. Without the output of the “real economy”, the company simply cannot use enough income to pay interest.
On the surface, the convertible bond will not mature until 2027, and the coupon rate is 0, which means that it will only be used to pay the principal after 6 years. There will be no pressure to pay interest for a long time in the future. There is particularly high cash flow pressure; however, once there is a super bear market like 2014 or 2018, and the price of Bitcoin plummets by more than 50%, the micro strategy will become insolvent and on the verge of bankruptcy. At that time, if the micro strategy does not want to go bankrupt, the only option is to sell Bitcoin for cash.
Juan de la Hoz, an analyst from Seeking Alpha Investment Research Network, calculated that the market value of the micro-strategy stock price is 2.92 times the book value, and the bubble is too high. In other words, after spending 3 dollars, the actual value of what I bought is less than 1 dollars.
“I have never seen such a weird company. All in all, the stocks of micro-strategy, you should sell it.”
However, Seiler never seemed to care about internal and external comments within the company.
From satirizing Bitcoin to betting on Bitcoin
Now Thaler is so obsessed with Bitcoin, which he never thought of. Because shortly after the publication of “Mobile Wave” in 2013, he also tweeted satirized Bitcoin:
“Bitcoin will not jump for a few days. Sooner or later, it will end up just like online gambling.”
At the time, he thought that Bitcoin would either be declared illegal and banned completely, or it would be inferior to other cryptocurrencies, and he would withdraw from history.
Saylor’s tweet satirizing Bitcoin seven years ago
Seven years later, he finally became what he hated the most, becoming the world’s largest Bitcoin “gambler”.
In fact, this is not impulse, but a CEO of a listed company and a top student of MIT out of consideration for real interests.
Micro-strategies have special meaning for Thaler. Saylor went to the Massachusetts Institute of Technology to study with the dream of joining the army. Two months before graduation, he was found to have a heart murmur and was directly rejected by the Air Force. So he was “unemployed” two months before graduation. After more than two years in the workplace, he founded Micro Strategy, which became his only belief at the time. When he first became the boss, he owed more than one thousand dollars in debt. He had no house and could only sleep on the sofa of a friend’s house.
In the early days of the establishment of Micro-Strategy, Thaler stated that his wish was to build Micro-Strategy into a general-purpose business group that would be passed on forever from generation to generation. Therefore, he has rejected other people’s acquisition requests countless times.
At that time, he resolutely did not sell the company, and today he resolutely does not sell Bitcoin. At that time, he wanted to build a micro-strategy into a century-old empire, and today he vowed to hold Bitcoin for at least a hundred years. How similar the history is.
Saylor’s micro-strategy was once very smooth. With his technical advantages in business intelligence analysis software, he was successfully listed on Nasdaq. At one time, he was worth as much as 7 billion U.S. dollars. It was commented by the American elite current affairs magazine “Washingtonian” as ” The richest man in the capital”.
At that time, Seiler was only 35 years old and ranked second on the wealth list with only $1 billion.
But after entering the new century, Seiler and Wei Strategy have encountered more and more storms.
In March 2000, the US Securities and Exchange Commission (SEC) accused Seiler and two executives of failing to accurately report financial conditions for two consecutive years. At the end of that year, Seiler finally reconciled with the US Securities Regulatory Commission. Instead of admitting his mistake, he paid a fine of 350,000 U.S. dollars and voluntarily gave up 8.3 million U.S. dollars of “illegal income.” Subsequently, the company’s stock price plummeted, and Thaler’s personal assets also shrank by US$6 billion according to US media reports.
But the micro strategy did not stop there. Since then it has more than 4,000 customers in the public and private sectors, including Coca-Cola, Johnson & Johnson and Starbucks. Among the three sections of Nasdaq, the micro-strategy is listed on the Global Select Market (Nasdaq-GS), which is equivalent to the main board of China’s A-shares. Moreover, the renewal rate of blue-chip SAAS customers of the micro-strategy is very high, and the recurring income of licensing and support services continues to be high.
However, in the circumstance that the global economy is not prospering, the micro strategy has also ushered in a “middle-age crisis”, and the profitability situation is getting worse.
In 2016, the company’s net income was 90.91 million U.S. dollars; in 2017, it shrank directly to 18.2 million U.S. dollars; since then, it has been adjusted to 22.5 million U.S. dollars in 2018 and 34.36 million U.S. dollars in 2019; and in 2020, it will become A loss of 7.52 million US dollars.
The five columns in the middle of the table are the net profit of MicroStrategy’s 2016-2020 income statement (Source: Market Watch)
When the epidemic began to sweep the United States, the stock price of Micro-Strategy was in a long-term downturn, almost in a straight line, maintaining at the level of $128 per share. On August 11 last year, when MicroStrategy bought Bitcoin for the first time, the stock price did not fluctuate significantly. However, from this day on, MicroStrategy began to get rid of the stagnant water that has been a long time ago.
Earlier, there was news that MicroStrategy held a total of 105,000 Bitcoins, with a cumulative loss of more than 500 million U.S. dollars, and was also warned by Bloomberg that there would be an asset write-down of 77 million U.S. dollars.
But if you calculate carefully, you will find that the media reports are biased: the average cost of micro-strategies to buy coins is 26080 US dollars per coin. As of press time, the price of Bitcoin on the FTX exchange is 34960 US dollars. A rough calculation is to invest in Bitcoin. The profit of 933 million US dollars, far exceeding the net income of traditional business in recent years. As far as the company’s share price is concerned, even if it has recently fallen, it has remained above US$500, far exceeding US$120 at the beginning of last year.
In addition, according to recent data from Forbes this year, Thaler’s personal assets exceeded US$2.3 billion, returning to the ranks of billionaires, ranking 1362 in the world. Ranked fourth in the cryptocurrency rich list, second only to the founders of Coinbase, FTX and Ripple.
If Bitcoin’s subsequent rise and fall are put aside, at least for now, Thaler’s strategy of betting on Bitcoin is considered a success.
A true believer in Bitcoin?
Many people are curious: micro-strategies are profitable by investing in Bitcoin, but does Thaler really believe in Bitcoin?
Judging from the repeated bets on real money and the online and offline Bitcoin sermons, no one believes in Bitcoin more than Thaler.
“Time” had interviewed Seiler before. The reporter did enough homework and asked an academic question at the beginning:
Nobel Prize winner Robert Schiller mentioned a concept called’irrational exuberance’, to the effect that once the price of something rises, people will have an investment boom and spread rapidly like an infectious disease. Even if they do not believe that this thing is valuable, people will join the ranks of gambling because they envy the success of others. Is Bitcoin an example of such irrational prosperity?
Seiler’s reply was also very straightforward:
Oh no, on the contrary, Bitcoin is a textbook case of a rational response to inflation. What is “rational behavior”? Find the means of value storage to realize value preservation and appreciation. What is “speculation”? Shorting, squeezing, and killing each other is called speculation. Bitcoin investment is not speculation at all! Bitcoin is a new technology, just like Facebook and Google in the financial world, there is a lot of room for value-added in the future.
The reporter was dissatisfied: “If this is the case, why is Bitcoin so famous for ordinary people?”
The reporter was referring to the noise from traditional finance. The stock god Warren Buffett once said that Bitcoin is “the square of rat poison”, and this year he refused to discuss Bitcoin at the shareholders meeting; JPMorgan Chase CEO Jamie Dimon said that Bitcoin is a “scam”, and Bitcoin is a waste. When time, employees dare to fry coins, he will just open it.
Thaler’s reaction was very mild:
This is a problem of paradigm shift, no one can be blamed. What’s more, these people are very smart, so they can be so successful in their careers. We can look back at history, and it is not difficult to understand: when electricity was invented, most people on the earth could not understand what it was for 24 months after hearing the word. There is a philosopher at Harvard named Thomas Kuhn who once said this: A new paradigm means a radical change in the way of looking at the world, and vested interests often will not accept this new thing. Our only hope is On the next generation. Because unless there is a war or a very serious incident, these vested interests will change their minds; young people are not the same.
Photo of Michael Thaler in an interview with Time magazine
The reporter asked: “Then, do you have any ambitions?”
Saylor only said one sentence: “I want to repair the balance sheet of the world.”
All this has to go back to March last year. At that time, Micro-Strategy had $500 million in idle cash; Thaler at that time had not had such a big interest in Bitcoin. On a rainy day, he looked out the window and saw the Washington Monument facing him, and asked his subordinates to buy US Treasury bonds.
However, the US epidemic quickly got out of control and became a more serious country than China and Italy. In response to economic shocks, the Federal Reserve first implemented a zero interest rate, and then went crazy printing money, the scale of which even surpassed the 5,000-year history of human currency.
“We must ensure that the rate of return on investment exceeds the depreciation of the U.S. dollar. After much deliberation, Bitcoin is qualified.”
Thaler also attended this year’s Bitcoin Global Conference in Miami. At the meeting, he left another sentence that excited countless people:
“I think Bitcoin is the safest, most reliable, and most certain thing in the entire economic universe.”
Of course, some people also raised doubts about his “loyalty.”
Vlad Costea, an analyst from a republic of the former Soviet Union, dislikes the routine of selling feelings: “I suspect that Thaler has learned “The Art of War”. He should have been a member of the Bitcoin development team since he left, such as Gavin Andresen, Mike Hearn and Jeff Garzik learned their lesson. They don’t intend to develop Bitcoin, but just want to maintain the status quo. This is best for his company. Moreover, his company partners include the US Department of National Security, the Department of Defense, and the military. , How can this persuade decentralized believers?”
Sun Tzu once said: “Therefore, the good will win in all battles, and the good who are not good; the soldiers who do not fight, the good and the good.” After all, he is very good at using social media for “brand promotion.” It is similar to Trump and Musk in degree. Moreover, if there were no media reports, people would not have noticed that the $500 million in cash vacated by the micro-strategy at that time was obtained by laying off hundreds of employees and reducing the company’s traditional business.
Indeed, human nature and technology are very complicated, but for many Bitcoin fans, they would rather believe that Seiler is a true Bitcoin believer than Musk is second.
Life is to play games with God, if you don’t all in, there’s nothing
People like to say that Saylor is a “zealot” (zealot). On this point, Seiler admitted more than twenty years ago.
“My belief is: if you want to play a game, it’s best to be all in. There are no exceptions. I don’t believe those who keep one hand will have the last laugh.”
Seiler believed in Christianity and was baptized. But in his view, life in the real world is like playing a game with God.
“Look at my ring-there is a dam, right, and a beaver. This beaver is playing games with God in the waves. Edison is also playing games with God. Rockefeller, Carnegie… these people are all Like me, I’m just playing a game in my life.”
Like the founders of other Internet companies, Seiler also has a life experience that is almost legendary. After a whole life of hesitation and struggle, I have a deep experience of life like a play.
On February 4, 1965, Thaler was born in Nebraska. Because his father was an Air Force officer, he moved from an early age to military bases in Japan, New Zealand, Nebraska, and Florida. At the age of 11, the family began to settle in Ohio, in Fairborn County near Wright-Patterson Air Force Base. This base is where the legendary remains of flying saucers and alien corpses are hidden.
When he was a child, Saylor lived next to the air base where alien bodies were said to be hidden (Source: Google Maps)
Seiler is a good boy who loves to read and has a good reputation in his alma mater, Fairborn High. At the graduation ceremony, he was selected as the representative of outstanding graduates to speak; the whole school conducted voting activities, and he was selected as the “most likely person to succeed.” A classmate Spahr later recalled: “This guy reads more books than all of us. Tell him something, he can always take you to ancient Greece and Rome and have a big talk.”
It is precisely because of the yearning for the “Axis Age” (note: proposed by the German philosopher Alexandre, referring to the ancient Greek and Roman era, which is roughly equivalent to the Spring and Autumn and Warring States period in China), that Seller is always on top. Philosophical Twitter:
Bitcoin is a group of network wasps. They serve the goddess of wisdom, rely on the fire of truth for a living, and become smarter, agile, and powerful at an exponential rate. There is a wall of encrypted energy behind them.
Twitter netizens draw “Internet Hornet” based on Thaler’s post
Once, a media interviewed Seiler and asked him why he likes to read so much. His answer may be something 99% of people can never guess:
His parents wanted him to read “serious books,” and Seiler liked to read comics. For a child, 25 cents for a comic book is too expensive. In order to cultivate Thaler’s study habits, the family made a decision: As long as Thaler finished reading a “serious book”, they would pay him a dime (10 cents). In this way, in order to save money to buy comic books, Seiler desperately read the classics, holding a book wherever he went.
He has understood since childhood: the more books he reads, the more money he earns, so that he can exchange more things he wants in the market. Therefore, in one summer vacation, he can finish reading a hundred “serious books.” Even as the boss of an Internet company, Seiler still retains the habit of reading paper books.
On the first day of college, Saylor wore a T-shirt with the sleeves off and went to class. The T-shirt is printed with the Def Leppard (Def Leppard) pattern. In the 1980s, the Def Leppard and Michael Jackson were unmatched. He also trimmed his beard to look like a band member, so that when he gets close to him, he can smell a strong smell of heavy metal. During college, he also liked to jump to the roof and play the guitar in the dead of night, making “strange sounds”.
Brothers like to call him “Nuclear.” Seiler seems to like the nickname, half drunk and half awake, once said: “I was a’nuclear engineering’ major from the beginning, and my personality is quite irritable. Sometimes when you are close to me, I can feel a flame burning. . As long as there is me, everyone has to retreat and disperse like nuclear fission.”
Seiler also has a temperament of “returning after all his wealth is gone”, so he is not so sensitive to many things. In the year he became the richest man in Washington, D.C., a neighbor drove into Thaler’s house and smashed it into pieces. The furniture, gas pipes, and exterior walls were all broken. Later, recalling the car accident, he said lightly: “It’s no big deal. The five minutes of going to the scene are interesting. But it’s really meaningless. Everything in the office is better than this guy driving to my house. It’s ten thousand times more important. I criticized the secretary at that time, saying: Just call me and tell me about this mess? Why do you want me to go to the scene? There was something wrong with the house, and it’s not a matter of life. I don’t even bother to blink my eyes. Anyway, broken things can always be fixed. What a big deal.”
When he just graduated, Seiler worked for DuPont, an accounting giant, doing data models for them to predict growth. Thaler predicted that in the last decade of the 20th century, there would be a huge bubble and DuPont’s performance would plummet.
The executives were very unhappy, thinking that Thaler’s Windows computer was running too slow, so he made a mistake, and asked him to recalculate it with an Apple computer. Seiler insisted on his opinion at the time and quarreled with the company for a long time. In the end, DuPont decided to pay Seiler a salary of 350,000 US dollars and let him start a company for analysis instead of staying in the DuPont office. This money later became the founding fund for Thaler to create the micro strategy.
His personality is too strong and unpredictable, so despite many secrets, he is still single and has never been married.
In the company, his character also makes employees love and hate. Micro-strategy was nominated as one of the 100 best employers by “Fortune” magazine, but the chaos of internal management also made employees feel very uncomfortable.
On one occasion, Seiler told reporters in Washington, D.C.:
“I never said that I want to change everything in the world. But if I want to lead the world from ignorance to knowledge, or even’omniscience’, there is something religious in it. But to be honest, if God came to the world In time, he will be very disgusted with the world now.”
Strong personality, perseverance and unhesitating spirit, belief in all in philosophy, from this perspective, it is not surprising that Seller bet on Bitcoin.
Understand and believe
On May 15 this year, Seiler posted a very short tweet:
“Bitcoin is eternal”.
Saylor’s “Bitcoin Eternity” tweet this year
I have to say that having such a genius bet on Bitcoin is both a fortune and a disaster for the Bitcoin community.
As a book-loving Christian, Seiler should understand that medieval Christianity once had a controversy that affected the history of modern science: Is it because of belief that people understand the content of their beliefs? Or is there faith because you understand the content?
Thaler’s Bitcoin beliefs are not groundless. Before deciding to buy Bitcoin, he has carefully compared various investment options such as cash, bonds, stocks, gold, real estate and Bitcoin.
“Calculated in terms of the current supply of M2 in U.S. dollars, it will increase by 5% in 2020, and it will increase by 24% every year in the next 20 years. This means that purchasing power is declining. At least for the next 3-4 years, what we have Banknotes depreciate by 15% every year. The macro-economy still has an annual inflation rate of 2%. After calculating this account, the Fed is like sneaking into your backyard and blatantly robbing your wealth.”
In the currency market, the U.S. dollar will become weaker and weaker. This means that the capital market, real estate market, commodities, and gold are not good. The actual rate of return on investment is almost zero or even negative. In contrast, “Bitcoin is a hundred times better than gold, or even a million times better. I will not sell Bitcoin. I want to hold Bitcoin for a hundred years.”
Of course, countless people have asked him: Isn’t your company doing Bitcoin ETF? If Bitcoin falls, isn’t the company going to end?
Seiler is very firm: “Bitcoin is not a security at all! Bitcoin is currency!”
For him, understanding is faith, and faith is understanding. This is true whether it is Christianity, earthly life, or Bitcoin.
In the eyes of the outside world, the huge volatility of Bitcoin means extremely high risks, and the combination of leverage makes the company on the verge of bankruptcy at any time, which is extremely disrespectful to investors. In addition, the high degree of simplification of the investment portfolio also exposes micro-strategy stocks to similar or even higher risks to Bitcoin, and is a strong sell target.
However, with Thaler’s character, even if Bitcoin does plummet, it is estimated that he will not “repent”.
He has always been the person who has no hesitation, the clever boy who earns money by reading books in the Air Force compound, the Massachusetts schoolmaster who likes to jump to the roof and play the guitar, and the technical master who wants to create a business myth that will last for generations.
That gambler who believes in Bitcoin.
Reference
Michael Saylor, the CEO Who Turned a Software Company Into a Bitcoin Company
Why MicroStrategy CEO Michael Saylor Bet Company Cash on Bitcoin—and Wants Other Corporations to Join Inwk
https://time.com/5947722/microstrategy-ceo-bitcoin/
The Seven Billion Dollar Man
https://www.washingtonian.com/2000/03/01/the-seven-billion-dollar-man/
From the Ground Up and Up
https://www.washingtonpost.com/wp-srv/washtech/daily/june96/061596saylor.htm
How & Why Michael Saylor & MicroStrategy Can Become Bitcoin Villains
https://bitcoin-takeover.com/how-why-michael-saylor-microstrategy-can-become-bitcoin-villains/
MicroStrategy 1Q21 Financial Statement
MicroStrategy: Balance Sheet Analysis
https://seekingalpha.com/article/4430815-microstrategy-balance-sheet-analysis
MicroStrategy’s Bitcoin Binge May Trigger $77 Million Writedown
https://www.bnnbloomberg.ca/microstrategy-s-bitcoin-binge-may-trigger-77-million-writedown-1.1619892
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