Michael Saylor, the CEO Who Turned a Software Company Into a Bitcoin Company

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:16)

And I'm Tracy Alloway.

Joe Weisenthal (0:19)

So Tracy, there's still no Bitcoin ETF, as you know. I mean, for years, people have been trying to float one, still not one, but there are various publicly listed instruments that have exposure to Bitcoin, that in the meantime, people are buying and selling to, yeah, basically find a way to get exposure to the asset class or whatever you want to call it through a listed equity.

Tracy Alloway (0:48)

Yeah, that's right. And I know we've been talking about the possibility of a Bitcoin ETF for many, many years now. It's kind of surprising that that hasn't happened just yet, but you're right. There are a number of public companies that are now a play on Bitcoin and they kind of range from the more, I guess you could say outrageous or unusual to the more traditional. So at one end of the spectrum, you have a grayscale Bitcoin trust, which is sort of trying to replicate the ETF structure without explicitly being an ETF. And then at the other end, you have, remember all those companies like Long Island ICT that changed their name to include blockchain and just sort of jumped on the bandwagon.

And those have been going up this year along with the Bitcoin price as well. And then of course, you have everything in between.

Joe Weisenthal (1:41)

Right, it is exactly right. So some companies are very tangentially related to crypto or they're like, oh, we're suddenly a blockchain company, even though we used to sell ICT.

Or some companies, they're like, oh, we bought some Bitcoin mining rigs and we're going to do something like that. So there is a range of exposures, but over the last several months, really since this summer, I'd say one company has sort of really jumped out from the rest of the pack in the degree to which people view it as kind of a Bitcoin play or a real sort of a direct exposure to fluctuations in the coin itself.

Tracy Alloway (2:22)

Yeah, I think that's fair to say. And that company is, of course, MicroStrategy. And we've seen them buy up a bunch of Bitcoin.

So basically, using their cash reserves to buy Bitcoin. So instead of holding a bunch of government bonds in their sort of corporate treasury function, they hold something like Bitcoin, or instead of holding bonds and stocks and gold, they hold Bitcoin. And it's been a really interesting development because it's actually meant that the company's share price is basically tracking the price of crypto now.

Joe Weisenthal (2:56)

Yeah, exactly right. So, and it was a really well timed buy. I mean, I think it was like the middle of the summer, maybe it was August, I think. They announced that they were going to buy some Bitcoin, a pretty good chunk of it.

And then they announced that they're gonna buy some more. They recently even sold a convertible note to buy more Bitcoin. At the same time, the price of Bitcoin has skyrocketed over the last two or three months.

Shares of MicroStrategy have skyrocketed in concert. And so they've really become this sort of the publicly listed Bitcoin-exposed company, I guess you could say, that people are talking about this year. And the company's already also become legendary. All the Bitcoin, hardcore Bitcoin maximalists and fanboys love this company now because they see it as sort of paving the way and maybe leading to more companies having Bitcoin exposure in their treasury.

Tracy Alloway (3:54)

Yeah, and we should note that MicroStrategy is also led by Michael Saylor and he's become a big, big name in the Bitcoin community. I think Barron's called him Bitcoin's most important proselytizer. So that gives you some indication of the regard that he has within crypto.

Joe Weisenthal (4:16)

Exactly right.

All the Bitcoin people I follow on Twitter absolutely love it. They love him. And I'm excited that Michael Saylor, the CEO and founder of MicroStrategy is joining us today. So Michael, thank you very much for joining us.

Michael Saylor (4:32)

Tracy, Joe, thanks for having me. Happy to be here.

Joe Weisenthal (4:36)

So what is MicroStrategy? I mean, I feel like a lot of people probably first heard about the company this summer when you announced that you were going to be putting some of your holdings into Bitcoin, but you've been around a long time.

What is MicroStrategy? What does it do? What's the story?

Michael Saylor (4:52)

MicroStrategy is the world's largest publicly traded business intelligence software company. We got started in 1989, and in the early 90s, we invented an approach for doing analytics against large relational databases. So if you had billions of rows of data, your McDonald's or your Target, and you needed to extract insight like market basket analysis or marketing uplift, or if you're a big bank and you want to do credit analytics against a portfolio of hundreds of millions of accounts, you needed to do complicated analytics on a large relational database. Nobody in the world knew how to do it, and we invented an approach and created this software platform to build those apps. And that was our early breakthrough, and we grew on that platform. We came public in 98