- Co-founder’s big bet on bitcoin backfires savagely
- Stock has plunged 45% this year as cryptocurrency prices plunged
- Co-founder will become executive chairman with focus on enterprise tools
Bitcoin champion Michael Saylor is stepping down as chief executive of Wall Street-listed MicroStrategy (MTR:NASDAQ), the software company he co-founded, shifting to the role of executive chairman.
Investors didn’t care much when MicroStrategy was solely an enterprise analytics business… then in 2020 it bought a ton of bitcoin - $250 million worth, attracting retail traders in their droves.
As of 30 June 2022, MicroStrategy reports it currently holds roughly $2 billion in bitcoin, making MicroStrategy little more than a cryptocurrency equity holding company.
Saylor has been a huge advocate of bitcoin but markets have turned savagely against the cryptocurrency as investors went right off risk assets. From $64,400 highs less than a year ago, bitcoin’s value has plummeted, now trading at $23,132, having scraped levels below $19,000 at one stage this year.
MASSIVE BITCOIN WRITE-DOWN
Saylor’s departure comes in the wake of news of MicroStrategy’s second-quarter earnings, where it ran-up a net loss of $1.062 billion, mostly due to having to slash the value of its bitcoin stake by nearly $1 billion ($917 million), taken as an impairment charge.
Saylor has led MicroStrategy since he co-founded the business in 1989 with Sanju Bansal. Massively exposed to bitcoin, MicroStrategy’s share price has become intertwined with the cryptocurrency.
The stock has lost 45% this year to date, although news of Saylor’s switch in roles has helped – the stock rose to three-month highs following the news, up about 2% to $316.
Phong Le, MicroStrategy’s current president, will take Saylor’s place as CEO.