$MSTR Has Outperformed Every Asset Class And Big Tech Stock

Michael Saylor joins us this morning,

MicroStrategy Chairman and CEO joins us in the first on CBC interview.

Michael, it's great to have you back.

Thanks for having me, Carl.

We've asked you for a very long time about sort of the bifurcated corporate strategy

between Bitcoin and software.

Is that what's behind your move to chair?

Yeah, I mean the company's been executing on a Bitcoin strategy for the past two years.

And it's worked really, really well, notwithstanding the volatility.

Our stock's up 123% through August 1st.

And if you compare our performance to Bitcoin, Bitcoin was up 94% in that time period.

But the S&P is only up 23% and Nasdaq's up 13% golds down, bonds are down, silver is down.

We nearly tripled double the performance at Google.

We outperformed Apple, which is only up 43% Microsoft's up 34%.

Amazon meta and Netflix are down.

So you never would have guessed that a mid-size software company and the enterprise software space

could outperform all the big tech and every asset class and even Bitcoin from a standing start.

But it's worked extraordinarily well for us.

And do you attribute it to Bitcoin?

And by the way, on your tweet this morning, in my next job, I intend to focus more on Bitcoin.

How can you focus more on it than you already have?

The secret is creating a hybrid company that's got a stable enterprise software business

with stable revenues and good cash flows.

And then adopting a Treasury Reserve strategy using Bitcoin as the Treasury Reserve asset.

And so, yeah, I've said before Bitcoin is hope.

And Bitcoin is the strategy that we used in order to outperform during a very difficult financial period

when most currencies are crashing and most assets are struggling.

And I would recommend it to anyone that's looking at a good Treasury strategy.

And yet, Michael, during the quarter, of course, we reported that there was a $918 million

in paramount charge just due to the sell-off of Bitcoin.

And I'm just curious how long has the transition been in the works to have you be executive chair

from the CEO role?

Is it linked directly to this quarter's results?

Yeah, no, there's no relationship between the transition and that right off.

It's a non-cash right off.

And our investors look through that as does the board of directors and the officers.

Fong has been the president of the company for the past two years and the CEO, Eric Parent.

He has been president and CFO until May of this year.

But given the size of the balance sheet, the opportunities in front of us,

the company really needed a world-class dedicated CFO.

So when Andrew Kang joined us in May, we checked that box.

That cleared the way for Fong to step up the role of president and CEO.

He's an extraordinarily talented executive and this will make him even more effective.

But in that same time period, I have emerged as an important advocate and spokesperson

for the Bitcoin community in a worldwide basis.

And this will allow me to take the role of executive chairman

where I can be a more enthusiastic advocate for Bitcoin, Wall Fong, and Andrew

manage the corporate operations to execute on the micro strategy ongoing business strategy.

It seems like we always spend all of our time with you, Michael, on cryptocurrency

and not enterprise software.

I wonder, are you going to miss that part of the business?

And what do you make of comments from others in the space that suggest longer lead cycles?

A more difficult thing, a time getting renewals and bookings, especially in hard-hit areas like Europe.

Okay, it's a great business.

We have very enthusiastic about it.

I'm not going away. I'm the chairman of the board.

I remain the controlling shareholder of the company.

And I'll be working on innovation and other corporate strategy activities with Fong.

We're a very, very good team.

But we're enthusiastic about the business intelligence business.

And I think 100 years from now, people are going to want to buy business intelligence out of the cloud.

That is not going away.

The Bitcoin strategy has helped us weather the financial storm, you know, of currency evaluations and the like.

And it has raised the visibility of the company by orders of magnitude.

And it's given us a lot of financial flexibility because of our strong balance sheet position.

Michael, I just wanted to follow up on that because I know the accounting for, you know, unbalanced sheet cryptocurrency is still pretty nascent in terms of how to account for it.

But clearly, your stock does get whipsawed and there is significant volatility in aligning so closely with Bitcoin.

So yes, while some investors may look past the impairment charge for the quarter, others may look at that as a, as a, look at your company as a levered bet on Bitcoin.

So how do you kind of advise looking ahead of, you know, into the rest of the year on the prospect for additional volatility here?

Do you see that ultimately streamlining over time?

Well, you know, I say volatility is vitality and a lot of people ignored our stock two years ago because once every quarter we had some news plus or minus a few percent.

Now there's more news every 15 minutes in our stock than there used to be in months.

So interest in trading our stock is elevated by one to two orders of magnitude.

You can't really ignore us.

And yes, one part of our strategy, the Bitcoin strategy is a levered long Bitcoin strategy and we don't make any apologies for it.

But the other part of the company is a very stable mature enterprise software business, which generates consistent cash flows.

So I think it's been a benefit to our shareholders.

I mean, that's why we're 123% against the Nasdaq 13%.

That's the volatility is the price you pay for the performance.

As for the future, a lot of people are afraid of volatility.

You know, if you don't want volatility, you can buy gold. It's down 13% in the same time period.

We're up.

And I do think the volatility will come off gradually over the next four to eight years as regulatory clarity arrives to the market.

And the market is educated.

But we're not afraid of the volatility.

We embrace the volatility and I think that all of the wins are blowing in the right direction for us.

I'm curious, you're comment about how your Bitcoin stake has raised raise your visibility in the eyes of customers because I can envision a customer saying,

I love your product, but it seems like you've got this whole other business that's the distraction.

If I wanted a crypto house, I could go find one.

What I want to need is a software company.

Yeah, well, it turns out that every CFO, every CEO, all the C suite, they're all aware of the crypto revolution.

They're all thinking about how to get engaged.

And so one thing that you do in an enterprise software business is you have to reach the C suite.

And our Bitcoin strategy has put us right up alongside Microsoft and Oracle and SAP in terms of visibility to the C suite.

So it's a benefit in terms of marketing and sales.

We're well, we're well endowed.

We've got a huge balance sheet and that's a benefit for corporate stability.

It's been a delight for our employees.

It's been good for our partners.

It allows us to get our message out.

So it is a net positive for the entire enterprise software business.

Michael, I just wanted to get your thoughts real quickly on a new Senate proposal that would give the CFTC oversight on policing Bitcoin and Ethereum.

Do you think that would be a good thing as a big holder of Bitcoin?

You know, this is the most exciting thing going on in the world.

It's a global phenomenon.

Everybody wants digital property like Bitcoin.

Everybody wants digital currency like the US dollar.

It's pretty obvious that the 24, 7 friction free mobile app is the future of finance.

And that means everybody wants to get it on the action.

So that means every regulator is going to be interested.

The Senate, the Congress, the White House, but but every sovereign is interested.

This is an ongoing debate in Europe, in the Middle East, in Singapore.

I think that what's happened is we have catalyzed the interest of regulators and putting forth a set of rules and regulations.

It's going to be good for the industry.

It's above my pay grade to a pine on which bill in the Senate will be successful and which regulatory agency will have which responsibilities.

I don't know, but I do know that there are large mega investors that have been afraid to put huge amounts of capital into this asset class until they understand the rules of the road.

So as the regulators sort out the rules of the road and provide that clarity, it's going to be great for Bitcoin.

My line, Michael, really quick. Does the move to chair? Does the overall change in the management structure imply any change in strategy or any net selling of Bitcoin at the margin?

You know, our officers and our directors are unanimously committed to the Bitcoin strategy.

I think people heard that on the conference call yesterday.

Our new CFO is excited about it. Fong is excited about it. I speak for the entire board of directors.

We didn't go down this path without thorough consideration.

As you can see from the numbers, it's been a screaming home run for the shareholders. It's been great for our customers, our employees, our partners.

We're full speed ahead.