MicroStrategy blew up during the dot-com era, before Michael Saylor transformed it into the world's largest corporate Bitcoin holder. Did he learn his lesson?
In March 2000, Strategy executive chairman Michael Saylor watched more than $6 billion disappear from his fortune in a single day.
MicroStrategy's shares had plummeted more than 60%, thrusting the thirty-five year old software entrepreneur into the center of the dot-com crash.
The company later settled civil fraud charges with the US Securities and Exchange Commission over its accounting practices without admitting or denying wrongdoing. MicroStrategy did not cause the dot-com bubble to burst, but the saga was one of the era's high-profile corporate blowups and the company became a symbol of the periods excesses and risks.
Now, more than 25 years later, the Bitcoin true-believer once again finds himself in the eye of one of Wall Street's most closely watched financial experiments.
The company, now known simply as Strategy, holds 843,775 Bitcoin, more than any other public company. It has inspired dozens of listed firms to adopt Bitcoin treasury strategies of their own.
But Strategy is no longer simply accumulating Bitcoin, it has developed a series of financial engineering strategies that divide investors and analysts. Some see it as a sophisticated corporate treasury model that can't lose, while others believe the risks are piling up on top of one another.
“The conversation shifts beyond simply acquiring Bitcoin to how those positions are financed, managed and, when necessary, traded or monetized,” Drew Forman, senior vice president and head of strategy at Talos, told Cointelegraph.
On June 29, Strategy unveiled a new capital framework allowing it to sell Bitcoin to fund preferred stock dividends, build its cash reserves and repurchase securities.
The case against MicroStrategy in 2000. Source: SEC
For a company that spent more than half a decade insisting its Bitcoin was to be accumulated rather than sold, the move caused alarm bells to ring.
Related: Lyn Alden says Bitcoin needs no savior as Strategy sells $216M of BTC
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