MicroStrategy Reports $1 Billion Loss, CEO Steps Down To Focus On Bitcoin (bloomberg.com) 61
MicroStrategy co-founder Michael Saylor gave up his chief executive officer title and said he'll focus more on Bitcoin after the enterprise-software maker reported a loss of more than $1 billion related to the second-quarter plunge in the price of the cryptocurrency. Bloomberg reports: Saylor, who founded the Tysons Corner, Virginia-based company in 1989, will continue to serve as executive chairman as retains its Bitcoin buying strategy. MicroStrategy President Phong Le will take on the chief executive role. The company also filed with the Securities and Exchange Commission to register 450,000 shares. MicroStrategy took a $917.8 million impairment charge related to the decline in the value of the Bitcoin it holds. Bitcoin tumbled 59% in the quarter, and traded about 45% lower than the price at the end of the year-earlier period.
Revenue dropped to $122.1 million. Analysts polled by Bloomberg expected revenue of $123.25 million in the second quarter. Net quarterly loss of $1.062 billion compared with a loss of $299.3 million in the same quarter of last year. The quarterly loss is almost exactly twice the company's revenue in the last 12 months. As of June 30, the carrying value of the company's 129,699 Bitcoins was $1.988 billion, the company said, reflecting the cumulative impairment loss of $1.989 billion. The cumulative amount is now more than Bitcoin on the company's balance sheet. "MicroStrategy's original strategy and consulting business needs full-time attention," said Henry Elder, head of decentralized finance at Wave Financial. "Now Michael can focus on what he does best, promoting Bitcoin. And the company can focus on making more money to buy more Bitcoin. They are basically doubling down."
Revenue dropped to $122.1 million. Analysts polled by Bloomberg expected revenue of $123.25 million in the second quarter. Net quarterly loss of $1.062 billion compared with a loss of $299.3 million in the same quarter of last year. The quarterly loss is almost exactly twice the company's revenue in the last 12 months. As of June 30, the carrying value of the company's 129,699 Bitcoins was $1.988 billion, the company said, reflecting the cumulative impairment loss of $1.989 billion. The cumulative amount is now more than Bitcoin on the company's balance sheet. "MicroStrategy's original strategy and consulting business needs full-time attention," said Henry Elder, head of decentralized finance at Wave Financial. "Now Michael can focus on what he does best, promoting Bitcoin. And the company can focus on making more money to buy more Bitcoin. They are basically doubling down."
Re:"Focus more on bitcoin" (Score:5, Funny)
What do these people do anyway?
Synergy information paradigm solutions innovation. :)
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I'm fairly sure I found their Mission Statement [youtube.com].
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They made lots of money on software and lost a billion on Bitcoin, so... they're going to focus on Bitcoin?
Makes perfect sense to me.
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I've seen management at previous companies I've been at do similar things. They focus on where they're losing money to the exclusion of their core until it bites them so hard on the ass they're essentially turbo-fucked. It was pretty lulzy watching the entire management team get sacked when the company up the road got bought out by a national competitor because they kept tripling down on their stupid. Too bad, so sad, pass the popcorn.
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What do these people do anyway?
Con rich people into giving them money. Late stage capitalism baby, you've gotta love it!
Re:"Focus more on bitcoin" (Score:4, Insightful)
Well... focusing on their shitty, overpriced BI tool hasn't been working out for Microstrategy, either.
Re:"Focus more on bitcoin" (Score:4, Insightful)
What do you mean? He's already experienced at losing large amounts of money. Crypto is the perfect move for him.
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It's just BI analytics software. Makes pretty charts and graphs. But they are now tainted with that bitcoin insanity.
And I quote from this Sept 18, 2020 tweet of michael saylor:
#Bitcoin is a swarm of cyber hornets serving the goddess of wisdom, feeding on the fire of truth, exponentially growing ever smarter, faster, and stronger behind a wall of encrypted energy.
https://twitter.com/saylor/sta... [twitter.com]
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So their enterprise software business is a withering cash cow, and the executive team understand that the only way to bring in really strong profits and achieve fat bonuses is to take whatever cash they can scrape together to the biggest casino in town.
Once upon a time, "Would you bet the farm/company on it?" was a nugget of sage wisdom, advocating caution. Today, it is a gambit that executives purposefully employ to the detriment of their employers. Get lucky, and the amazing profits make for huge bonuse
Bitcoin (Score:5, Funny)
Let me see if I got this right:
They just lost a billion in Bitcoin so he's stepping down as CEO to focus more on Bitcoin.
Re:Bitcoin (Score:5, Insightful)
They just lost a billion in Bitcoin so he's stepping down as CEO to focus more on Bitcoin.
When you're rich enough you can actually fail upwards. It's a shame these sorts of people never seem to lose everything to the point where they have to take a job ringing up groceries at Walmart.
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Yes, because they did not loose 1 billion in bitcoin. If they sold the bitcoin, they would have lost 1 billion, but they did not, so they did not loose anything.
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Yes, because they did not loose 1 billion in bitcoin. If they sold the bitcoin, they would have lost 1 billion, but they did not, so they did not loose anything.
If you bought $100 worth of Bitcoin and now you have $33, your portfolio has a loss of $67. Sure, you might have hopes and dreams and jellybeans that it'll go back up if you HODL, but that's a gamble - as of this moment, you have a loss.
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Yes, because they did not loose 1 billion in bitcoin. If they sold the bitcoin, they would have lost 1 billion, but they did not, so they did not loose anything.
If you bought $100 worth of Bitcoin and now you have $33, your portfolio has a loss of $67. Sure, you might have hopes and dreams and jellybeans that it'll go back up if you HODL, but that's a gamble - as of this moment, you have a loss.
Sure. But equally, if you bought $100 worth of Bitcoin, and it rose in value to $1b, and then dropped to $500m, you haven't lost $500m. Even if you knew it had peaked, you'd be very hard pressed to liquidate that $1b anyway.
That said, putting all your eggs in one basket is a ridiculous thing to do.
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That's the trick isn't it? Cashing out isn't simple when you're talking about serious amounts of money.
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The company went on to make several additional large purchases of Bitcoin; as of May 2022, the company has spent around $3.965 billion purchasing Bitcoin at an average purchase price of about $30,700 per Bitcoin. [wikipedia.org]
Since bitcoin is currently around $22k, they have lost almost of third of the money they have invested in it, so according to wikipedia that is about $1.3B
So, yeah doesn't matter how much you try and pretty it up, that is a hell of a loss, the sort of things that induces panics wherever there is no
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They have an unrealized loss, not a real loss. It's an important distinction.
If you have positive cashflow, an unrealized loss only hurts on paper; both the company with the loss and society at large because of the way taxes allow accounting for such unrealized losses.
In other words, if you own an asset outright, and its price changes, you still have the asset. Well, if it's a real asset like a house or car or tool anyway.
Re: Bitcoin (Score:1)
Re: Bitcoin (Score:2)
This sounds amazing. Where do I invest???
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Re: Bitcoin (Score:1)
Maybe he thinks that's the reason Bitcoin tanked. He lost focus.
Thank goodness he's working on it again so everyone will get their money back.
Quick! Everyone needs to buy back into Bitcoin!
Re: Bitcoin (Score:3)
Yes. It's a polite way to shuffle him off to a place where the damage has been done already, while making sure the grownups take control of the actual business.
If he has enough shares, he can do a lot of damage otherwise.
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Yup. Sounds slightly better than "spending more time with my family (because I am also negotiating an expensive divorce while trying to keep my mistress off the radar)".
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Do what they say, "Buy the dip!"
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"Now Michael can focus on what he does best, promoting Bitcoin."
He just changed focus to get in more suckers to raise the price again. Seems totally valid.
Re:We'll dig our way out! (Score:2)
Seems like a fairly apt metaphor for a lot of crypto schemes
The Simpsons
" Molloy casually observes that Homer and the cops would like to know where he hid his loot. When Molloy tells them the stash is hidden under a giant "T" somewhere in Springfield, they rush from the station hoping to find the buried treasure. After checking several possible sites, the crowd returns to get more information from Molloy, who directs them to a large, T-shaped palm tree on the outskirts of town. The residents excavate the si
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“Stay away from it. It’s a mirage, basically. In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending.” — Warren Buffet, CEO of Berkshire Hathaway
You probably don't understand (Score:1)
This guy is wealthy, and will stay that way no matter how many companies he runs into the ground. After all, it's only investors' money. As long as he talks a good game (and he's a specialist at that), he can just keep up the charade forever.
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This guy is wealthy, and will stay that way no matter how many companies he runs into the ground. After all, it's only investors' money. As long as he talks a good game (and he's a specialist at that), he can just keep up the charade forever.
Sounds like he'd have a shot at running for president, if the whole doubling down on Bitcoin thing doesn't work out.
Re: You probably don't understand (Score:2)
It's loaned money from creditors, who are likely fucked.
Steps Down To Focus On Bitcoin (Score:2)
that's like saying you're going to start focusing on your health by eating asbestos.
We used to call them (Score:5, Informative)
The application that we used is called IntelligenceServer... but I didn't see a damn thing intelligent about it. In fact it was extremely dumb... After a long while struggling with it, we switched to Cognos.
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Re:We used to call them (Score:4, Insightful)
I just have one question: is their AI strategy positioned to reorient our alignment to qualitize synergy so that we can retarget our hyperlocal growth hacking?
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That sounds like a bunch of technobabble marketing speak to confuse the situation. It leverages your structured and unstructured data along with your social networks to synergize marketing strategies with optimal sales-to-production pipelines maximizing year-over-year growth with minimal TCO.
Re: We used to call them (Score:2)
well, duh, everybody knows THAT. The question is whether that is a good thing or a bad thing.
Re: We used to call them (Score:2)
They're reporting tools. They make pretty reports and dashboards. That's it.
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Yeah they do. Cognos is a BI company. The problem you have is that you expect BI to define what specific intelligence you need. It's kind of like expecting a database vendor to say they only track employees, or only manage inventory, or only record financial transactions.
Business Intelligence and analytics are both right there on Cognos's front page. It's up to you to know what data you have, and what intelligence and predications you want to make from it. Some people may use it to estimate when their inven
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Ah, Cognos. I first got my hands on it in the mid aughts, and as a mid sized company (~$500M in revenue) I was given full access. It was quite useful, usable, and perfect for me, the data gleaner. I am sure it has become more encrusted with cruft and MBA candy since, but back then it was pretty cool and extremely valuable.
Since then, I have been forced to use mostly Oracle BI, and that is a homeless abortion of a product.
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Yeah, and I used it in 2005ish, so, it WAS a company then...
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It's up to you to know what data you have, and what intelligence and predications you want to make from it.
And that's always been the problem with "big data" & analytics, i.e. It's not what you *want* to make from it, it's what you *can reasonably* make from it, which turns out to be very limited in most cases. If you have a question, first decide what data you'd need to answer & how you'd need to control to threats to construct validity & how you'll deal with reliability issues. Anything else is just bad science & wouldn't make it past a peer review (which isn't setting the bar very high judging
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"Analytics" (as opposed to proper science)
Oh horseshit. Analytics is the application of proper science and math. Nothing more. Nothing less. It doesn't exist in a vacuum that people make up themselves. Just because you've seen a few bad implementations of data analytics doesn't make it any less "proper science" than seeing a typical slashdot post and declaring that statistics isn't "proper maths".
I do agree it's overhyped though, that said quite a few times the hype pays off (not for MicroStrategy though, clearly they don't have a clue how to run a
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It's like Tinkerbell from Peter Pan (Score:4, Funny)
The problem is they didn't believe hard enough in the Bitcoin!
Musk to leave Tesla (Score:3, Funny)
It's like Musk is going to leave Tesla, and focus on customizing F-150s to roll coal on cyclists.
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Where can I contribute to this campaign?
And again I can only say, rejoice (Score:2)
Imagine this happening 3 months earlier when bitcoins were actually worth something and he had to explain a loss of 5 billions!
Microstrategy? (Score:2)
Buy this man a lunch (Score:2)
Hedge against inflation (Score:2)
FTFA
"MicroStrategy began investing in Bitcoin in the summer of 2020, after Saylor said he saw it as a hedge against inflation"
That seems to be completely invalidated. Bitcoin is most definitely not performing as a hedge for inflation. In fairness neither is gold, the old standard-bearer.So who knows nowadays?
"As of June 30, the carrying value of the company’s 129,699 Bitcoins was $1.988 billion, the company said, reflecting the cumulative impairment loss of $1.989 billion. The cumulative [impairment
Losing money (Score:2)
"Now Michael can focus on what he does best, losing money on Bitcoin fantasies".