Michael Saylor, CEO of MicroStrategy, on Friday defended bitcoin-funded debt acquisitions from his software company, telling CNBC that he sees buying the cryptocurrency now as comparable to investing in Facebook in the early days of the social network.
“We have $ 2.2 billion in debt and pay about 1.5% interest, and we have a very long time horizon,” Saylor said on “Squawk on the Street”. “Our point of view is to be a lever, a long bitcoin company is a good thing for our shareholders.”
MicroStrategy became famous on Wall Street last year after the Virginia-based company began buying and holding bitcoin, initially using money in its balance sheet to acquire digital tokens before returning to the debt market to do more. purchases. Saylor’s own profile has risen as the executive has evangelized what he feels is the great potential of bitcoin, comparing it to “digital real estate”.
Some people are very skeptical about MicroStrategy’s bitcoin bet, concerns that have only been amplified in recent months that the world’s largest cryptocurrency by market value has endured a period of weakness.
“If you borrowed billions of dollars at 1% interest and invested in the next Big Tech digital network you thought would be the dominant Amazon or [Alphabet’s]Gugg Google or Facebook for money, why don’t you? “Saylor said.” I mean, if I could borrow $ 1 billion and buy Facebook a decade ago for 1% interest, I think I’d have done pretty well. ”
Facebook went public in 2012, about eight years after its founding. His public debut got off to a rocky start, but he developed a company worth more than $ 1 trillion in stock market value.
Michael Saylor, CEO of MicroStrategy, speaks at the 2021 Bitcoin Convention, a crypto-currency conference held at the Mana Convention Center in Wynwood on June 4, 2021 in Miami, Florida.
Joe Raedle | Getty Images
MicroStrategy shares have increased about 400% in the last 12 months, although the stock has been more than cut in half since it hit $ 1,315 on February 9th.
The company’s first bitcoin acquisition was announced last year on August 11, inclusive 21,454 bitcoins with an overall price of $ 250 million including taxes and fees. In August last year, bitcoin was trading in the low range of $ 11,000.
As of June 30, when the company’s second quarter ended, MicroStrategy held a total of 105,085 bitcoins at a common cost of $ 2.7 billion. This bitcoin find was estimated at around $ 4 billion, based on Friday’s trading price of around $ 39,000, according to Coin Metrics.
Bitcoin hit an all-time high of nearly $ 65,000 per symbol in mid-April, coinciding with the excitement surrounding the cryptocurrency exchange on Coinbase’s direct blockbuster list, which erupted after an initial pop. Bitcoin has also struggled since then, twice breaking below $ 30,000.
“Everyone is looking for this open way to store value and move value at the speed of light with a computer chip and a mobile phone,” Saylor said. “You had Google. You created digital books. You had Facebook; you created digital communications. Apple gave us digital music, and Amazon gave us digital retail. Bitcoin is digitally owned in a large open money network,” he said.
“Our view is that it’s only a matter of time before billions and billions of people have mobile phones pugged into bitcoin, and we just want to be here first,” Saylor added.
To further defend the company’s bitcoin game, Saylor said it has helped MicroStrategy’s business intelligence software operations. In the second quarter, total revenues increased 13% year-over-year to $ 125.4 million. It increased by 6% compared to the second quarter of 2019, when the coronavirus pandemic was yet to disrupt the global economy.
“It’s a door opening,” Saylor said of the company’s bitcoin association. “It’s very important that people know who you are. That starts the conversation. It’s been great for our enterprise software business and it’s been great for employee morale, too.”