Microstrategy CEO Saylor becomes chairman
MicroStrategy’s Michael Saylor is stepping down as CEO to become the company’s executive chairman, according to a statement released by the company on Tuesday afternoon. The company’s chairman, Phong Le, will succeed Saylor.
Saylor has served as CEO since the company launched in 1989. MicroStrategy went public in 1998.
MicroStrategy’s stock is down more than 48% this year. Bitcoin is down over 51% over the same period.
“I believe that separating the roles of Chairman and CEO will allow us to better pursue our two business strategies of acquiring and holding bitcoin and growing our business analytics software business. As Chairman executive, I will be able to focus more on our bitcoin acquisition strategy and related bitcoin advocacy initiatives, while Phong will be empowered as CEO to manage the company’s overall operations,” Mr. Saylor said in the communicated.
The announcement comes as the company announces its second quarter results, in which its total revenue fell 2.6% from a year ago.
MicroStrategy may technically be in the business of enterprise software and cloud-based services, but Saylor said the publicly traded company is also the first and only bitcoin cash exchange-traded fund in the United States.
“We’re kind of like your non-existent spot ETF,” Saylor told CNBC on the sidelines of the Bitcoin 2022 conference in Miami in April.
So far, the Securities and Exchange Commission has only approved ETFs that track contracts that speculate on the future price of bitcoin, instead of the cryptocurrency itself. The commission has refused to give the green light to one of the formal demands for a pure bitcoin-based ETF – a financial instrument that would give investors the option to invest in bitcoin without having to go through the stages of l signing up for an exchange, opening a crypto wallet, or dealing with any other logistics involved in buying and holding bitcoin.
“If there was a cash ETF, you’d pay a 1% fee, and it wouldn’t be mined. With MicroStrategy, we have a software company that generates cash flow, so we convert our cash flow into bitcoin,” Saylor said in April.
MicroStrategy has added bitcoin to its corporate balance sheet over the past two years. The company has now spent nearly $4 billion to acquire bitcoin at an average price of $30,700.
MicroStrategy used the company’s debt to buy bitcoin, and in March Saylor decided to take another step towards normalizing bitcoin-backed financing when he borrowed $205 million using his bitcoin as collateral – to buy more cryptocurrency.
“We have $5 billion in collateral. We’ve borrowed $200 million. So I’m not telling people to go out and get a highly leveraged loan. What I’m doing, I think, is do my best to pave the way and normalize the bitcoin-backed funding industry,” Saylor said in April.
“As people realize they can borrow against something, they realize they’ll never have to sell it, and then they start extending their time horizon from – ‘That’s 36 months speculation’ to – ‘It’s a 36-year detention.'”