Michael Saylor steps down as CEO of Microstrategy — Here is what it means for bitcoin

Michael Saylor steps down as CEO of Microstrategy — Here is what it means for bitcoin

A shake-up of MicroStrategy Inc.’s government suite has crypto merchants weighing the implications for bitcoin as Michael Saylor steps down as CEO.

MicroStrategy MSTRs,
+12.73%
shares rose practically 13% on Wednesday, a day after the corporate mentioned Michael Saylor would step down as chief government and tackle a brand new position as chief government.

Firm Chairman Phong Le will take over as CEO from August 8. The transition was introduced as MicroStrategy reported a $1.06 billion web loss within the second quarter, together with $917.8 million in digital asset impairment losses, as the value of bitcoin crashed.

Phong will handle general company operations, whereas Saylor shall be “extra centered on” the corporate’s bitcoin acquisition technique and associated bitcoin promotion initiatives, in keeping with MicroStrategy.

As some of the vocal bitcoin BTCUSD,
+1.52%
Bulls, Saylor fueled MicroStrategy’s transfer to purchase the cryptocurrency in bulk first in the summertime of 2020 after which double down. The corporate has raised a complete of $2.4 billion in debt to buy the digital asset. As of June 30, he had round 129,699 bitcoins. The choice comes at a price: Because it first purchased bitcoins, MicroStrategy has recorded impairment losses of greater than $1.98 billion on these property.

Some critics attributed MicroStrategy’s government transition to such losses and speculated the corporate would quickly shed its crypto property, however Chris Kline, co-founder and COO of Bitcoin IRA, mentioned he believes the transfer is bullish for digital property. .

MicroStrategy is “doubling down right here,” Kline mentioned in an interview. “They’re letting the brand new CEO take over enterprise operations. And Saylor is shifting right into a hyperfocus, bitcoin acquisitions and technique position inside the software program firm,” Kline mentioned.

MicroStrategy representatives didn’t instantly reply to requests as as to if the corporate plans to promote any of its bitcoin holdings.

BTIG analyst Mark Palmer mentioned in a word Wednesday that he believes Saylor’s change in place is not going to have a major impression on MicroStrategy’s general technique or how it’s executed. “Saylor’s main focus since MSTR launched its bitcoin acquisition technique in August 2020 has been the execution of that technique,” Palmer wrote.

In the meantime, the corporate’s bitcoin impairment prices are “primarily meaningless as a result of they haven’t any impression on the inherent worth of the corporate,” in keeping with Palmer. “That worth could be simply decided because it comes from solely two sources: the market worth of MSTR’s bitcoin holdings and the worth of its enterprise analytics software program unit,” Palmer wrote.

Saylor has been a “very optimistic power for bitcoin” in shopping for and selling the digital foreign money, in keeping with Charlie Morris, chief funding officer at ByteTree Asset Administration. “However I am unable to see them having an impression on the value of cryptocurrencies in the long run.” in keeping with Morris. “The markets are actually under no circumstances the identical in 2022 as they had been final 12 months.”

Moreover, “lots of people purchase MicroStrategy [shares] as a result of it’s troublesome to purchase [bitcoin spot] ETFs,” in keeping with Morris. “So the largest menace to MicroStrategy could be an SEC-approved bitcoin spot ETF.”

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