Michael Saylor Bitcoin Predictions | 10X Money Talks

Don't interrupt me, man. I'm trying to

tell people how to make money.

>> Okay, make Come on. Let's make some

money, guys.

>> Because the last time I was with you,

you called the fund that I was doing a

[ __ ] fund.

>> Can I interrupt you one more time,

though, just so the audience knows first

time I meet this guy,

>> he says to me, I am your senior though

and

>> it's your podcast

>> and and so Gary, Gary, huh?

>> Your fans audience, they want to hear

you, not me. But what what message do

you have to the degenerates?

My my message is

>> guys, Michael Sailor is an American

entrepreneur, inventor, and Bitcoin

advocate to say the least. Okay?

Co-founded Micro Strategy 1989, served

as CEO until 2022, and now executive

chairman, MIT graduate, Sailor pioneered

business intelligence software, and

amassed a personal fortune exceeding $4

billion. He's going to be in our studios

today, and this interview is whack. This

cat has accumulated 460,000

Bitcoin. I got that close to him telling

me how much he added today when it hit

$94,000.

Look, we're going to be talking today

about some of these other Salanas, the

Ethereums, the Ripple. He tells me at

the end of the interview if they're

going to make it or not. Okay. When does

he have to liquidate? I think the answer

is going to shock you. We had a bunch of

people live watching while we were

running. Interview was phenomenal. I'm

going to tell you something. I've

interviewed some of the biggest players

in the world. This guy that's going to

sit in that chair is one of the most

difficult interviews I've ever done in

my life. Okay. The amount of First of

all, his vocabulary is sick. Okay. His

understanding of the financial markets

is ridiculous.

I've been with him five or six times.

I'm I'm starting to just catch up with

him. I'm going to try to get my

questions in. I offended him on multiple

at times where I had to cut him off so

many times. We almost got in a fight

again. Stay all the way to the end of

the interview. Thank you so much for

being here. Make sure you hit the

notifications. I'm going to do more

interviews like this. Also, he's going

to be going to the Middle East and he's

coming back and he's trying to drop by

our 10X wealth conference. So, if you're

going to be in Miami, what December 12th

and 13th, uh, make sure you get here.

family offices, RAAS, uh, personal

finance, financial consultants,

financial coaches. If you're in the

wealth space, a family office, you run a

family office and you're looking to see

what the wealthiest of the wealthy are

doing to reduce their taxes and create

generational wealth for the next well

for immortality. We even talked about

immortality and church and religion

today. Okay, make sure you come see us

at our wealth conference. Until then,

enjoy this interview with Mr. Michael

Sailor.

>> What a day to be doing this interview.

>> Yeah.

>> Huh. Perfect timing.

>> Michael Sailor, appreciate you taking

time with me. It's quote. We've met a

couple times now and um really, you

know, inspired by everything you're

doing today, Friday. What What's the

date today, guys?

>> 14.

>> You probably know the date, huh?

[laughter] We got We got Bitcoin down to

94 and a half. What's your

>> a buying opportunity?

>> It is.

>> Buy the dip.

>> Yeah. What? What are you Did you buy

some this morning?

>> I am. I'm buying.

>> We have bought Bitcoin every day this

week.

>> Every day.

>> Every day this week. And we don't We

normally report our Bitcoin purchase on

Monday morning. So on Monday morning,

we'll put out the announcement.

>> Uhhuh.

>> Is it a lot?

>> Yeah. So So Mike, when you when you're

public company when you're a public

company, you you can't can you not say

that day? Are you restricted and you

have to say it on Monday

>> or could you tell me today? No, I I have

to tell you on Monday.

>> Okay. [clears throat]

>> We we do it every Monday. That's our

cadence before the market opens and

>> and we follow an AK and in the AK we'll

tell everybody exactly what we bought,

what we paid, how we funded it. Yeah.

You know, so we like to be precise about

those things.

>> Yeah. And and so look, I met you back in

January. I think my brother brought me

over to your house and I didn't really

know about the Bitcoin thing. I'd been

studying. I got some 13 years ago and I

dabbled a little bit and I asked you

about mixing this with real estate and

you've given me some great advice.

You've been a little short with me every

once in a while because I think you you

know you get tired of dumb questions

right. Does that happen? Do you get

frustrated with people that are new to

the space and you're they're asking you

questions you're like don't you get

this?

[snorts] You get you know it depends

upon the time of the day. If you've been

talking for 12 hours, then it's then you

can get a bit tired by the 13th hour.

>> So,

>> you catch me in the morning.

>> Yeah. Is the morning's the better time?

>> Cuz the last time I was with you, you

know, the last two times I was with you,

one you you called the fund that I was

doing a [ __ ] fund.

>> I I just suggested you should put more

Bitcoin in it.

>> And I do it and we went from 85 to 15 to

now we're like one-third debt, one-third

real estate, oneird Bitcoin.

>> Really? That's aggressive. I think I

think the point that I'm making is is

you search the entire world for a good

idea and there aren't that many good

ideas, right? I mean, Apple was a good

idea 20 years ago or Amazon was a good

idea, you know, and Bitcoin is a good

idea and a good idea is something that

could 10 to 100x its money. So if you

think about all of the things you

discovered in the last 30 years that

could increase by a factor of 10x or

100x maybe

>> 10x and by the way Bitcoin is 10x in the

five years since I got in the business

but

>> you know think about all that and and

then ask yourself the question should

you put 2% of your money into a good

idea are you going to have are you going

to have 49 other equally good ideas?

Okay, you put 10% of your money, put 10%

of your money into an idea that you know

10xes, you double your money. But of

course, you know, is everything else

does that mean that you're going to put

90% of your money into a not good idea?

So my issue there is if I think about my

history as an investor, uh my number one

regret is is if you found a good idea,

you know, you wish you had bought more.

>> Right. That's right. Always. and you

wish you'd never sold.

>> Mhm.

>> So, if I if I can spirit you back 20

years and give you the chance to buy

Apple or Amazon or Bitcoin,

>> I didn't buy any of those.

>> Are you going to give advice to someone

they should put two or three or 5% of

their portfolio in? It's like I I think

if you're going to do it, you should put

in an amount of money that changes your

life. Yeah. So, well, look, if you're if

you're diversifying and you find a

brilliant idea, maybe you put 5 to 10%

of your wealth in it because you want to

stay diversified,

but you know, Jeff Bezos didn't get rich

by having 5% of his assets in Amazon and

selling 95% of his Amazon stock as soon

as he could,

>> right? So Steve Jobs,

>> I think he had

>> Ellis, Mark Zuckerberg, Jeff Bezos,

you know, Elon Musk, Bernard Arno, they

don't get rich by selling 95% of their

good ideas and keeping the last five or

by selling 90%.

So I just think when you find if if

you're pitching someone a digital real

estate fund,

>> Yeah. You know, and if real estate's

going to go up 7% a year and Bitcoin's

going to go up 30 or 30% a year, then

you don't want it to be 10% Bitcoin and

90% real estate. It's just a little bit

better than everything else in the

world.

>> Why not put it half and half?

>> Yeah.

>> And then why don't you deliver 20% gains

a year when the entire rest of the real

estate industry gives you seven?

Because if it's a bad idea, it ought to

be zero and 100% real estate. Yeah. And

if it's a good idea, then you might as

well go 5050 because because that way

you're giving someone juiced real estate

three times as good as every other real

estate investment in the world. I just I

think you're t if if it doesn't work and

you put 10% of your money into it and it

doesn't work, then you just had a dog

real estate fund and it failed, right?

Yeah. So, so when you have an idea, you

either think it's going to work and you

might as well put in enough such that

you win and everybody gets rich or don't

do it at all. I'm I'm not a big fan of

that. I'll give you one more example. I

use, you know, Rockefeller invents

kerosene.

>> Yeah.

>> You know, kerosene is the most highly

distilled form of um of crude oil and

it's jet fuel. It's rocket fuel, right?

It's pure liquid energy. Okay. So, um, a

good idea is I build a rocket. I build a

rocket ship. I build a jet engine. I

build a jet airplane. Or maybe I create

gasoline or diesel. I give you a car, a

truck. Those are all good ideas. Henry

Ford, Boeing,

>> you know, they [clears throat] did that.

What's a conventional idea, safe idea? I

put a kerosene lamp in the back of my

horse and buggy,

>> right? And I tell all my horse and buggy

customers that now they can read a book

while they're in the horse and buggy

crossing the nation or I put a kerosene

heater in the back of the buggy because

my customers complain about it taking 30

days to go across the Rockies in a buggy

and so I heat them up.

>> And my point is you don't really want to

be the dude that's 2% invested or 3%

invested in the revolutionary idea. You

want to create the rocket ship. And so

in that case, I I feel like either don't

do it.

>> Yeah.

>> Or do it in such a way that it's so much

better than everything else in the world

that everyone will sell everything else

and buy your thing and everybody, you

know, lives happily ever after. So that

that's my view.

>> Where do you think the diversification

who who sold the diversification to

America and to the world? The idea to go

into a Yeah. Just send it over to to an

ETF or a mutual fund.

>> It's a it's a classic thing. I I think

when you don't know the answer,

when you have a hundred choices and you

you genuinely don't know the answer and

you're in the business of selling a

diversified fund, you pitch in

diversification.

>> Right. Right.

>> Right. So, I think partly the Vanguard

500, you know, John Bogle and then

conventional finance people,

but um

>> it's 11 trillion sitting over there.

It's done very well for them, but I

don't know that it's done that well for

the other.

>> Yeah. The world's full of hedge fund

guys that created diversified

portfolios, and their pitch was, "No one

decision we make is going to bankrupt

you, so give us all your money."

>> Right?

>> But if you actually look at the results,

they underperformed

>> consistently. Uh the king of

diversification is just to buy the S&P

index. But but generally I think that

there's a distinction here between uh

the f the the financial statisticians

that that want you to give them your

money. For them, diversification's a

good pitch because like, hey, you're a

retail investor or or you're busy and

I'm going to protect your money by

investing you in 27 uncorrelated

diversified assets and I'm going to

rebalance the portfolio every month and

I'm going to have 50 analysts that

rebalance the portfolio and I'm going to

charge a 2% fee and 20% of the upside

and my uh and and my value added is

consistent dynamic diversification. So,

so that's what they're selling and they

want you to believe that you need them

and they charge you when you charge 2

and 20, you're basically taking 40% of

somebody's capital over the course of 10

years, right? So, it's pretty expensive

service. On the other hand, there's

another view of the world which is the

engineers view of the world. When you

build an airplane, you've got the choice

of building the airplane in copper,

aluminum or steel or bronze or bricks

or, you know, wood. And there's a

there's a right answer, aluminum, and

everything else is the wrong answer. And

if you build it in steel, it doesn't

fly. And if you know, you build it in

clay, it doesn't work, right? You build

it in copper, it's not working. So in

engineering, there's a right answer. For

the plane, it was aluminum. For bridges,

there's a right answer. It's like steel,

right? You know, uh when you're creating

uh you know, a window, there's a right

answer, you know, for how you, you know,

what kind of glass you use and and then

there's a wrong answer. So, engineers

are used to asking the question, what's

the right answer? Like how about you

want to conduct electricity through a

line, copper or you know titanium or you

can pick a hundred metals but there's

one metal that works better than the

other metals. So if you're an engineer

and there's a right answer, you don't

diversify. You pick the solution because

otherwise you die. But when you don't

know the answer, when you're not sure

whether copper is going up or aluminum's

going up or steel is going up or a

bushel of corn is going up in price, you

know, and nor does your customer know

the answer.

>> Pick them all.

>> Well, you can create a service which is

I'll just give you a diversified mix of

all of them and that justifies your

business and you charge a lot of money

for it. But, you know, I think the

diversification only makes sense when

you when there is no right answer. It's

like the joke I, you know, example I use

is yeah, you're on a a sinking ship and

there's 10 lifeboats, you know, and one

of them, you know, is watertight and the

other have holes in the bottom of them.

Find the one that's watertight. Put the

entire family on that one and then then

you live. And pick the one that isn't

watertight. You're going to die, right?

You're not going to diversify across a

bunch of imperfect components.

>> Were you looking Were you looking four

or five years ago or before that? Were

you looking for something other than

what you were doing?

>> You know, in the during the COVID

lockdowns uh in the middle of 2020,

we had $500 million of cash

and uh [sighs and gasps] and the bankers

took the the interest rate to zero.

>> And yeah, we were

>> 500.

>> Yeah.

>> Half a billion of cash. half a billion.

And you know, so it's like you have a

$500 million real estate portfolio and

the mayor of the city unilaterally

reduces your rents to zero and tells you

they're going to they're going to rent

control the rent to zero for the next

five years because that's the right

thing to do because we're in a crisis,

right? There's there's COVID crisis and

if you don't like it, then you must not

be a good citizen, right? There's

something wrong with you, right? you're

you're just insensitive capitalist and

the right thing to do is we just reduce

the rents to zero forever

>> which is easy to do with somebody else's

money right

>> so that's kind of what happened during

co right I mean we we literally did it

with

>> rent yeah

>> you know and uh and we did it with

capital so when that happened if that

were to happen to you if someone said

I'm reducing your rents unilaterally to

zero forever and you could sell the

property and move to a different state

or move to a different city. You might

very well do that, right? So, we had

$500 million worth of property. It was

called treasury bills. It was

unilaterally reduced to a value of zero

per year. And I think Jerome Pal gave a

speech and he said very famously, he

said, "We're not even thinking about

thinking about raising the interest

rates until the year 2024 or 2025."

>> Right? Repeatedly he said it.

>> I didn't need to hear that twice.

So I thought I better go find something

else to buy other than treasury bills.

So we started thinking could we buy a

stock portfolio? Could we buy a

portfolio of art? Could we buy some real

estate?

Could I buy a fraction of a sports team?

>> Should I buy a bunch of gold? Or should

I buy a bunch of digital gold?

>> And by the process of elimination, we

went through all those things.

>> Have you been introduced to Bitcoin

prior to that?

>> No, not really. Okay. I mean, I'd never

really seriously thought about it. Okay.

Right.

>> So, I went through the process of

elimination and I started thinking maybe

I should buy gold. But then I thought

what I'd really like is something that

feels like gold, a non sovereign store

of value bearer instrument like you know

and I like something which is the best

cross between gold and uh Google.

>> Mhm. I wanted a digital monopoly

>> on money,

>> digital gold. And I thought, well, this

crypto stuff looks like it's digital

gold. A crypto coin, 21 million crypto

coins, because the appeal of gold is

it's scarce and desirable as a store of

value. And and uh the appeal of crypto

is I can teleport it and I can

self-custody it and I can program it. So

then I just started thinking well what's

the crypto network which is most like

gold and I eventually decided Bitcoin

was digital gold and so we bought

Bitcoin because yeah gold was the best

idea of the 19th century and arguably if

you wanted portable capital you wanted

portable property you wanted money for

the past 5,000 years right gold was

generally a a pretty popular idea uh but

In the 21st century, what you'd like is

something that's as desirable as gold,

but you want it to be programmable. You

want to move it at the speed of light.

You want to put it on an iPhone.

You know, you and the thing about

Bitcoin, which is better, in addition to

being programmable and digital, was that

it's absolutely hardcaped to 21 million

coins where and so the inflation rate of

Bitcoin is zero. It was pretty obvious

to me over the long time horizon as as

the limit goes from 0 to infinity the

inflation rate is zero.

>> Why why is it zero?

>> Because there's 21 million that's all

there's ever going to be.

>> Okay. So

>> there's 21 million.

>> Yeah.

>> Right. And and the the rate at which we

create more Bitcoin is asmtoically

following to zero. It's falling

>> as what is that word?

>> You know asmtoically as a big word. It's

like it's like if I try to go to the to

the wall there and each each time I move

I cut my step in half.

>> Okay.

>> And I go half as far and half as far and

half as far and half as

>> that's asmmptoically approaching the

edge of the room but even over a billion

trillion years if I keep cutting my step

in half I'll never get there. Right. But

on the other hand you say well how wide

is the room? It's like it's like 12

feet.

>> Right. Right. Well, so with Bitcoin, you

know that there'll never be more than 21

million Bitcoin. And in public company

Parliament, you would refer to that as

the fully diluted share count.

>> The fully diluted Bitco count count,

Bitcoin count between now and a million

years.

>> Can't be any more shares.

>> It's like, it's like if you knew you

were going to 21 million shares.

>> Yeah. It's like when I'm valuing your

company, I want to know, well, what's

the total number of shares that can ever

be issued between now and 100 years from

now, right? I don't really care how many

shares you issued this week or this

month. I just want to know, are you

going to 21 million shares

>> or are you going to 2.1 trillion shares,

>> right? Right.

>> Right. And so the fully diluted Bitcoin

count was 21 million. And the

significance of that is that means the

inflation rate is zero.

>> But the inflation rate on gold is 2%.

And the fully diluted co gold count is

infinite because if I keep increasing

the amount of gold by 2% a year, that's

infinite amount of gold. Um if you if

you want to figure out practically how

you value it, well, when you increase

the supply of something by 2% a year,

that means that you're doubling the

supply every 36 years. That means the

economic halflife of your money is 36

years. That means the halflife is 36

years. That means you're going to live

70 years.

>> Mhm.

>> Okay. Well, what's the halflife if the

inflation rate is zero? Infinity. So,

what's your life expectancy if you if

the inflation rate is zero? Your life

expectancy is infinite. You're immortal.

You're living for a billion trillion

years. I

>> like that idea.

>> Zero is a billion trillion years. You're

a god.

>> Mhm. 2%

is you're going to die. Half of you dies

in 36 years, the other half dies in the

next 36 years. Maybe you make a hundred

years and you're pretty much done for,

right? And so it's the difference

between a mortal life of a human being

versus economic immortality.

Um, we can dismiss it if we just think

in the next 12 month time frame. But,

you know, if you're an engineer, it's

like, well, what's the difference

between you lose 2% of your energy every

cycle versus you lose none of your

energy every cycle. None of your energy

every cycle is perpetual motion. You

last forever. 2% of your energy every

cycle and you spend it 100 times,

there's nothing left, right? You burn

out the motor. Okay. So, I like the idea

of gold, but digital gold is better. And

how much better? infinitely better,

right? Infinitely better. So, in 2020,

we settled on Bitcoin, his digital goal.

We decided we're going to sell our 500

million worth of treasury bills and

we're going to buy $500 million worth of

Bitcoin.

>> First purchase was how big?

>> $250 million.

>> Wow. Dude,

>> next purchase uh two weeks, three weeks

later was no, 20 days later or something

was uh 175 million.

>> Your first purchase was a quarter of a

billion dollars. half half of your cash

resp.

>> Yeah. Well, actually, I would have

bought it all, by the way. I wanted to

buy it all, but the board of directors

wouldn't let me.

>> Well, like my idiots, huh?

>> Yeah. My

>> I said that you didn't. [laughter]

>> So, so, but let me ask you, h how do you

make a decision after years of

accumulating that much fiat, that much

cash?

>> Yeah. How do you make a decision in a

week I'm going to drop a quarter of a

billion dollars, half of my reserves

into one investment? How do you get that

much conviction that didn't take a

minute?

>> The lockdowns hit.

>> The politicians make us close the

office.

>> Everybody goes home. Google and Apple

and Amazon and Microsoft start sniping

all of our employees from home.

>> It's pretty clear, right? If I if if I

want to if I want to destroy your

company,

I sentence all of your employees to home

jail, right? To home imprisonment, and

then I offer them 20% more to redirect

their computer browser to some other

other company. So, it's clear we're

going to lose all of our human capital.

The stock tanks to $9 a share and the

company's worth nothing.

>> This was Micro Strategy at the time,

>> 2020. Yeah.

>> Yeah. I'm telling you the story of TW.

You're asking me how did I

>> tell the audience the your software

company.

>> It's March of 2020.

>> Okay.

>> We're a software company. We're a $500

million software company and the

lockdowns come and all of our employees

get sent home and we're losing them to

Microsoft and Amazon. Uh and so we're

losing our human capital. Uh we're a

public company. The stock tanks. You

know, it's valued at half of revenue or

something. Well,

>> call it $3 a share.

It's what the company's worth. And if we

do, and then Jerome Pal says, "Well, you

know, the 500 million in capital, that's

worth nothing forever." Wow. And our

choice is either sell the company. It's

like a fast death. just sell the

company, give up, write off 30 years of

work, or a slow death,

cling on uh to $500 million of cash

yielding zero, watch it get inflated 20%

away a year, right? The inflation rate

was 20% at that point. We're printing

money like there is no tomorrow. Costs

are, you know, you can't see the

inflation in 2020 because it's illegal

to buy anything, right? When there's a

war and the government doubles the money

supply, but it's illegal to buy

anything, you don't see the inflation.

You see the inflation after the war ends

when it's when you can go buy an

airplane ticket or go to a concert or go

try to go to a hotel, you know, and at

that point everything doubles or triples

in cost except you don't have any money,

right? Because the government doubled

the money supply. So, it was pretty

clear to me that that uh the currency

was collapsing

and we were going to have all our human

capital stripped away and we were, you

know, having all of our financial

capital stripped away and, you know, I

think the the stock traded a million

dollars a day. like there's no one cared

at all about the company. And we're

either going to basically sell the

company, give up for, you know, $8 a

share, $10 a share or whatever, or we're

going to cling uh to life for five more

years, at which point all of our

employees will have quit. The product

won't be any good anymore. We've just

had all of our talent stripped away from

us. And then uh the world will say,

well, you know, they went out of

business because they deserve to go out

of business because they couldn't

compete with the big guys.

>> Mh.

>> You know, or we could do something. We

could take a risk, you know. So, it's

that that point in the movie where the

guy's sitting in the citadel with an

army.

>> Yeah.

>> And he and he sees there's a war and

there's the War of the Roses and there's

the, you know, there's the white faction

and there's the red faction, the the the

Yorks and the Lancasters. And you're

either going to sit there and get

starved to death by both of them or

you're going to pick a side and you're

going to ride out and you're going to

fight and if you you know and if you win

maybe you get to live and if you lose

well at least you you know you went you

went out fighting right and so that was

where we were at in 2020 and we decided

it's either a fast death or a slow death

or fight and I thought maybe I'd prefer

to fight.

So, so you thought at that time,

>> yeah,

>> buying $250 million worth of Bitcoin

>> in one day, had you bought any up to

this point at all? Like,

>> no. I mean, the D the way we got there

Bitcoin, no nothing.

>> Nothing.

>> No, I mean, look, it didn't happen in

one day. What happened is I concluded by

April that this was a way out. Bitcoin

was growing 80% a year at the time.

>> Mhm. Uh, so if you can buy something

appreciating 80% a year, that's a

commodity on your balance sheet,

>> faster than your company.

>> It's like, if you could buy a digital

monopoly growing 80% a year at one

time's revenue, would you?

>> Yeah, of course you would.

>> Yeah.

>> If you could buy a digital monopoly

growing 30% a year for the next 20 years

at one time's revenue, would you?

Everybody would. It It's not complicated

idea. Bit I expect Bitcoin to grow 30% a

year for the next 20 years. It's a

monopoly. You're getting it. You know,

you buy $100,000 worth of Bitcoin,

you're getting a $100,000 business

growing 30% a year. That's a monopoly at

one times revenue. Why wouldn't you?

Everybody would. Uh the breakthrough was

just thinking of it as doing a

acquisition of a digital monopoly on

Monday, right? It's the dominant digital

monetary network, right? So we have to

do a transformational acquisition and

>> and since there's no other company

growing 80% a year that's available at

one times revenue that'll sell sell us

sell themselves to us

>> Bitcoin was the deal right Bitcoin was

>> yeah so so we looked at it and we

thought we can buy the dominant digital

monetary network at onetimes revenue

it's growing 80% a year on paper it

looks just fine it's just no one ever

done it before but But um the theory

isn't that complicated. I mean what did

uh Facebook pay for WhatsApp or for

Instagram?

>> WhatsApp. Yeah.

>> WhatsApp.

>> I mean think what did Google pay for

YouTube?

>> Yeah.

>> Okay. So it's not a complicated idea.

You buy the monopoly

>> something that a billion people need.

Nobody can stop that's in hyperrowth

mode that'll sell itself to you cheap.

Why wouldn't you?

>> Yeah.

>> So I that wasn't the problem.

>> The problem was no public company had

ever done this before.

And so first I have to convince the the

officers of the company. Then I have to

convince the board of directors of the

company, right? And and that takes a

while. And then then yeah, the logical

thing is let's just go ahead. We're

going to bet the company on this buy 500

million worth. But you know, between the

lawyers and the risk managers, everybody

thought, well, that's too risky. So

let's do some I said, well, what about

I'll 400 I'll do a buyback. 400 million

of Bitcoin. I'll buy back 100 million of

stock. No. 350 million of Bitcoin, I'll

buy back 150 million of stock. No. 300

million of Bitcoin, I'll buy back 200

million of stock. No. Okay. Here's my

best and final offer. 250 million of

Bitcoin and I will buy back $250 million

of the stock in the open market, the

tender offer.

>> Okay.

>> So, so explain that to me. So, to you,

>> so when we announced the deal, what we

said was we're going to buy 250 million

of Bitcoin.

>> Yeah.

>> And we're launching a tender offer. The

stock was 120 bucks a share. We'll buy

you out at 140 bucks a share if you

don't like the idea.

>> So we basically said

>> who funded that?

>> The company.

>> Company.

>> The company had $500 million.

>> Got it. Okay.

>> And the company said, "We're going to

buy a

>> real estate guy." You got to remember

I'm a real estate guy, dude. It's like

to us it's like I got to see it. I got

to touch it. I got to feel it. So you

got to go slow with it.

>> I'm the CEO of a public company.

>> Okay.

>> And I want to do something very risky.

>> Got it. But you're and you're the

outside shareholder and you think I'm

crazy,

>> right?

>> So I say to you, I'm going to go bet the

company on Bitcoin, but if you don't

agree with me, I'll buy you out your

shares.

>> Got it. Got it.

>> And so I'm going to offer you $140 a

share.

>> $20 premium.

>> Yeah.

>> If you want to get off the ride,

>> how many people took took you up on

that?

>> So the way it worked is we announced the

$ 250 million in Bitcoin. Then we had a

20-day tender period. We made a tender

offer. We offered to buy up to $250

million.

The stock traded up, then it traded

above the $140 price, and everyone that

didn't like it sold into the into the

open market at north of 140.

>> Wow.

>> When the 20 days finished, we had $60

million worth of shares tendered. We

paid off the $60 million at the of

shareholders at 140. We had about $175

million of extra cash at that time. We

turned it around. bought Bitcoin with

that. So the first deal was 250 and that

second deal was after the tender offer.

It was the extra 175 million and then

the and then Bitcoin rallied, the stock

rallied, ran through the roof, you know,

and the rest is history.

>> So Bitcoin was what price then? Do you

remember? I'm sure you do.

>> When we we did the first deal, we bought

Bitcoin and we bought it like 11,800.

>> Okay.

>> And do you just you just bang the the

bell, right? You just hit it.

>> No. Then immediately Bitcoin crashed

down to 9,600

or something and we lost $40 million in

the next two weeks.

>> Oh my god.

>> And so

>> what's going on for you when that

happens?

>> Cuz that seems that's what happens every

time I buy it.

>> It drops 20%.

>> It's an instructive story because the

point is it was never easy.

>> Uhhuh.

>> It will never be easy. And if you were

buying expecting to get an immediate

risk-free return in the next two weeks,

you have the wrong attitude.

>> So we bought it, the price crashed, we

went through with the tender offer. We

got 175 million and we went and we

bought the next trunch at 10 at 10,200

or 10,300. So, we double down after the

dip and then it turns around, flies

through 12,000, runs to all-time highs

of $19,000. The stock 10x's.

>> Yeah.

>> You know, all the stock options get

exercised, we get another wall of money,

we buy another $50 million worth.

>> Well, where's the wall of money come

from? Explain the wall of money. It

sounds sexy.

>> All the employees had stock options.

>> Uhhuh.

>> And the stock options were Sorry, let me

just adjust my cushion.

>> Please help. the stock options are uh

you know struck at whatever 100 90 bucks

80 bucks. This is pre-slit. The company

eventually split 10 to one. So

>> so if these numbers seem different to

you that's because

>> we we split it 10 to one. But so the

stock options are whatever you know 80

90 100 110 when the stock's trading

between 90 and 120 during the lockdowns

the stock options worthless.

>> Mhm.

>> When we bought the Bitcoin and Bitcoin

rallied the stock went through the roof.

rallied up to 200, then $300 a share,

then $400 a share. When the stock

rallies, all the employees exercise the

stock options, and the company gets an

avalanche of money from stock option.

>> Got it. Got it. And so all they're

buying the shares at 110.

>> No, the comp No, the employees are

selling the shares.

>> They're selling the shares.

>> Well, they're selling the shares of 400

and they're exercising the option, which

is which means they're buying

>> they're buying the stock at 110 and the

company's getting

>> Got it. the the company gets the one.

>> Yeah. So, the company generated a lot of

stock option income because the stock

took off and so we bought another trunch

of Bitcoin

>> and the volatility spiked, the liquidity

spiked, the stock went through the roof

and by December of that year

um we uh were able to do a $650 million

convertible bond offering at 75 basis

points interest cost. So, basically free

money. So, someone gave us $650 million

of free money. Mhm.

>> by December. And by February, we did a

billion dollar deal at 10x. The strike

price was $1,400 a share. Remember, the

tender offer was $140 a share, right?

>> So, we did a convertible deal at 10

times the price of the the tender offer

maybe six months previous or the tender

offer was in September. So,

>> can you hold that? Can you hold that

thought?

>> Where where did you learn the financial

engineering part? Like, I know you're an

engineer by nature. Okay. You're a very

intelligent guy. You studied history.

But where do you Every time I'm with

you, dude, I'm just like, where did you

start seeing this? Did you look a lot?

Did you

>> No, I took the company public in 1998.

And so I'd been a public company CEO for

22 years by the time we went into this.

>> You were how old?

>> Um, well, when I would took the company

public, I guess I was 33.

>> Okay.

>> Yeah.

>> Jesus.

>> I started the company when I was 24. So

I started in '89. I was 24 and then we

were a private company from ' 89 till 98

and at 33 I took the company public and

then I lived through all sorts of

>> You went the IPO route.

>> Yeah.

>> The route what do you call that the

right of passage?

>> I guess you that's what you told me it

is.

>> Yeah. And uh you know I'd had experience

as a private investor and so I invested

in all these big tech stocks and I made

fortune I made a lot of money investing

in Apple and Amazon like 20x my money

and all the big tech things and um and

and you know I had a vivid recollection

that I'd worked myself to death like

3,000 hours a week for 10 years in my in

my business and I couldn't get ahead.

We're basically banging our head against

the wall against Microsoft. But 1 hour a

month I would invest in Google or or

Apple or something and I was making a

fortune and it was easy.

>> Mhm.

>> And you know I started thinking you know

if if I if I had to do again I think I

take the company money and invest in the

big tech stocks because then the

shareholders would all get rich because

simply working harder to compete with

Microsoft is not a way to get ahead,

right? They're just too powerful. It's

it's you cannot compete against the

monopoly uh of the world. So I had that

experience. I had some experience

trading swaps and currencies and and

other things. So I had an intellectual

interest in these things. But really

necessity is the mother of invention.

Grant,

>> it's like when someone tells you, you

know, I got some bad news. It looks like

you're going to die of something. You've

got 12 weeks to live. You all of a

sudden get religion. And you start, you

know, you go online and start

interrogating the the AI. You start

arguing with the AI about whether this

is right or wrong. and someone says

maybe you might want to change your diet

and the thing you dismiss for 50 years,

you think maybe I might want to change

my diet,

>> right?

>> You know, so I think you get open-minded

when you have this neardeath experience.

And

>> what they say in the history of science

and you know, one of my degrees at MIT

was the history of science. They say um

the only time you ever see a paradigm

shift is either when the old guard dies

like

you know people that think they know how

the world works just have to die just

got to have to get out of the way. Max

Plank said, "Science advances one

funeral at a time."

>> Right? And then the other time when

there's a paradigm shift when people

embrace a new idea radically is during a

war.

>> Right. War on COVID World War II, World

War someone's dropping a bomb on your

head and you're and you're a aircraft

denier. You don't believe in air power,

>> right? Right. You don't believe in

nuclear power and they drop an atomic

bomb on you. Okay. a lot of a lot of

things that people rejected that we

literally court marshal Billy Mitchell,

right? Like the military court marshaled

the guy that said, you know, the air

force is important and airplanes are

important. The army court marshaled him,

>> right? I mean, you know, Pearl Harbor

>> was a war.

>> What?

>> You think CO was a war or equivalent?

>> Absolutely a war. There are two wars

going on.

>> Yeah.

>> Right. Maybe three, right? There's a war

in CO technically, right? that that that

biological war there was a cultural war.

>> Mhm.

>> Right. There's a cultural war. The war

when we shut down every small midsize

business and bankrupted gym owners and

restauranteers and bar owners and

everyone that work with their hands in

the blue collar labor while we enriched

Wall Street and hedge fund managers,

right? Everybody on Wall Street had the

best year of their life. And everyone

that actually was a, you know, a

bluecollar laborer,

>> not only were they bankrupted, they were

thrown in jail for showing up to work.

>> Right.

>> Right. Had their reputations destroyed,

their accounts frozen, etc. There was

definitely a cultural war there. You

still can't talk about it, [laughter]

right? You It's still very difficult to

talk about. And then you had a currency

war,

>> a war on the currency, right? When when

you basically

determine that the interest rate is

going to zero, you're inflating the

currency through the roof, you're

devaluing someone's assets, right? I am

devaluing your currency and of course

all of the derivatives of the currency.

So, so there was a currency war as well.

And if you didn't notice it, right, you

must have been in a coma for the year. I

think everybody noticed it. And the

issue is how did people react to it,

right? And everybody's got their own

story of how they reacted to it. But I

think it was pretty transformational to