In the cryptocurrency circle, Michael Saylor, the boss of a company called MicroStrategy, is a well-known bitcoin hoarder. He has been on the industry news list again in recent days because he spent nearly 30 million US dollars from March 23 to April 4 to buy 1,045 bitcoins at an average price of about 28,016 US dollars per coin.
Michael Saylor (nicknamed "Saylor") started hoarding bitcoins in August 2020, when he bought more than 20,000 bitcoins for the first time, spending $250 million. Now, after more than two years of accumulation, as of April 5, 2023, MicroStrategy has become the listed company with the most bitcoins in the world, with a total of 140,000 bitcoins (accounting for 0.667% of the total issuance of bitcoins). You should know that the second largest hoarding company is Galaxy Digital (its boss Michael Novogratz is a super investment expert in the cryptocurrency circle), with only 40,000 bitcoins, while Tesla (the fourth largest listed company hoarding bitcoins) only has 10,725 bitcoins.
However, hoarding bitcoins is also a money-burning activity. So far, Sai Kuang Ren has spent 4.17 billion US dollars of financial resources. The average price of Bitcoin is about 29,803 US dollars, which is not cheap. To be honest, he is the first one to dare to gamble on this under the banner of the company. Of course, not every company will dare to follow suit, because Bitcoin is like crabs, and eating too much may cause diarrhea.
Why did Sai Kuang Ren embark on this road of gambling? In terms of personality, Sai Kuang Ren should not be an impulsive maniac. He was born in 1965 and is a master of science and engineering. He studied aeronautics and astronautics at the Massachusetts Institute of Technology (MIT). After graduation, he could not become an astronaut due to physical reasons, so he had to work as a consultant at DuPont. But soon in 1989, he and his Indian-American MIT alumni founded MicroStrategy, a software development service similar to PowerBI that focuses on data visualization, data analysis, and business intelligence. In 1998, he took MicroStrategy public and made a fortune.
However, after more than 30 years, MicroStrategy is clearly facing a bottleneck. There are not many independent data business intelligence software companies on the market. Most of them have been swallowed up by monopoly sharks such as Oracle, IBM, and Microsoft. MicroStrategy is walking on thin ice. MicroStrategy has also entered the Chinese market, but the Chinese boss it hired later set up his own company and created a local version of the product, which is both suitable for Chinese use scenarios and affordable. Naturally, MicroStrategy cannot survive in the new market.
By the second half of 2020, Sai Kuangren realized that the company needed a breakthrough. MicroStrategy's stock price has not risen much, hovering below $200 per share, indicating that investors are not optimistic about its prospects and that it will face a chronic death in the long run. The company still had hundreds of millions of idle cash on hand in 2020, but at that time, due to the new crown, the Federal Reserve reduced the interest rate to 0 in order to promote the economy, so it was definitely not cost-effective to deposit this idle money in the bank.
Although some people suggested that Sai Kuang Ren use his spare money to acquire some new industry companies to help MicroStrategy generate revenue, Sai Kuang Ren felt that acquisitions were not a breakthrough. He felt that the places where the spare money needed to be invested must meet the following three requirements:
1) The rate of return should be higher than that of investing in gold
2) It is best to have some potential for technological monopoly
3) It has not yet been strongly recognized by mainstream society
After much thought, the crazy man suddenly realized that Bitcoin was the only thing that met these three criteria, and he started hoarding Bitcoin. After that, the company's stock price also experienced ups and downs like the price of Bitcoin.
MicroStrategy's fate is now tied to Bitcoin, and its stock investors are no longer focusing on evaluating the profitability of its core business of commercial software, but on using it as a way to speculate on Bitcoin indirectly. Sai Kuangren is betting everything on his bet that Bitcoin will continue to rise in value in the long run. In fact, the logic of investment is that if you have a lot of spare money, you can spend it on the areas you are optimistic about or like (it is important to be optimistic about and like, otherwise it is difficult to admit defeat in case of losing all your money), and then wait for future developments, especially not to be frightened by short-term fluctuations. At least for now, Sai Kuangren is relatively mature and calm.