Jan joining us is the founder and executive chairman Michael Sailor along with our own Morgan Brennan.
Michael it's always good to have you so you don't think you have enough exposure about 158,000
Bitcoin holdings and micro strategy you want more? You can never have too much Bitcoin.
We're big Bitcoin bulls. Our thesis is that Bitcoin is digital property but without the risks and
liabilities of commercial real estate it's a digital commodity without the risk and the liabilities
of gold it's a digital tech investment without the risk and the liabilities of big tech and so we're
bullish. You know it's funny people sometimes forget that you're like a soft an enterprise software
company and I noticed that you're doing some new partnerships on AI with Microsoft and I wonder if
that kind of good news gets overshadowed or any kind of news about your fundamental business gets
overshadowed by just being a proxy for Bitcoin. We're really excited about our partnership with
Microsoft and AI. We're the first BI company to put AI into our product line and it provides great
artificial intelligence boost to our business intelligence business. We're going to use it to
grow the business by acquiring new customers and also it's accelerating cloud adoption within our
customer base. Yeah Michael it's Morgan and of course that business also helps enable you to buy more
Bitcoin. The fact that we have seen Bitcoin rally as strongly as it has over the past month. I mean
the SEC seems likely to approve a spot Bitcoin ETF after that key court loss. Does the introduction
of an ETF help or hurt investor appetite for micro strategy specifically? Well I think it's
going to help it's going to accelerate adoption and it's also going to accelerate institutional
awareness and education efforts of Wall Street to teach the 99% of the investors that don't know
about Bitcoin what it's all about. Micro strategy is a differentiated offering. I think spot
Bitcoin ETF he is a great thing for investors but we don't charge a fee. We use intelligent leverage
and we can generate attacks deferred Bitcoin premium for our investors. So for people that are
really long term bulls on Bitcoin we represent a pretty attractive option or alternative to a spot
Bitcoin ETF. Sounds like you think micro strategy as a stock is going to continue to command a Bitcoin
Bitcoin related premium then. Well if you're not charging a fee and you're generating a premium
and you're holding it over the long term then one would think that it'll be valued at a premium
versus the underlying asset. Mike Ola Bob-Passani here. Bitcoin is going to be having
halving next year. That's a rare event. Can you sort of educate the viewers on what happens
when that occurs and what if any effect that'll have on Bitcoin's price? Well most of the natural
sellers at Bitcoin in the market right now are Bitcoin miners and they have to sell to pay their
electricity bill and their capital cost and retire their debt. That's about a billion dollars a
month worth of selling into the market. The protocol forces that to be cut in half as of about
next April, late April. So you're going to see 12 billion dollars of natural selling per year
converted into six billion dollars of natural selling a year. At the same time as things like
spot Bitcoin ETFs increase the demand for Bitcoin. So that's why all of us are fairly bullish over
the next 12 months. The demand's going to increase. Supply's going to contract and this is
fairly unprecedented in the history of Wall Street. Can you just follow up on the Bitcoin ETF? Can
you sort of give us a sense of when you think you presumably you think the SEC is going to be
forced to approve this? Can you give us a time scale on when this might happen? Well I think the
Bloomberg analyst that cover this there of the opinion that it's highly likely to happen
by early January. I think it'll happen when it happens. But long term, I guess the most
important point to be made is institutions are adopting Bitcoin. It's highly likely that it will
happen if not by first quarter of next year at some point in the coming 12 months and we know
the having is coming. So if you've got a 12 month to 48 month time horizon, this is a pretty ideal
entry point into the asset. Michael I want to ask you about another regulatory change. That's a
foot. The Financial Accounting Standards Board voted unanimously to adopt a new standard that's
going to require businesses to use fair value accounting for Bitcoin and other crypto assets.
This could be meaningful for micro strategy. You just reported a loss, an impairment loss tied to
Bitcoin in your earnings last night. I think that number is now ballooned to more than $2 billion
in impairment losses since you started holding Bitcoin on your balance sheet. Expecting more
guidelines before the end of this year and then an implementation in 2025. What does this mean for
micro strategy? What does this mean for companies more broadly? Does it make it more attractive to
start to hold Bitcoin? Long term, this is going to open the door for corporations to adopt Bitcoin
as a treasury asset and create shareholder value with their balance sheets. I mean the big dilemma
in the market today is the magnificent seven seven companies are generating all the shareholder
returns and 7,000 companies are struggling to create shareholder value. Micro strategy secret
is we're leveraging our balance sheet as well as our P&L. We've got more than $5 billion of assets
on our balance sheet and Bitcoin is growing at three or four times the cost of capital.
So imagine what happens if other companies are able to use their balance sheet as assets instead
of liabilities. Right now the existing accounting it favors using credit and sovereign debt
and the after tax yield of credit isn't keeping up with cost capital and the result is most corporations
pursue delutive strategies of acquisitions, share buybacks, dividends which are taxable and they
can't really hold billions and billions of dollars a capital and beat the cost of capital and
generate shareholder returns. So this phas be accounting allows you to mark up and down the asset. It
allows you to recognize investor gains. You know a Berkshire Hathaway didn't have Apple. It
wouldn't be a winning stock but it's not practical for a thousand companies to hold Apple stock as a
treasury reserve asset. It is practical for them to start buying Bitcoin and and Phasbees accounting
opens the door for that. You know they're just so I know you're not a stranger to some of the Bitcoin
criticisms but Michael even even lately we're seeing Sandbank been trial Sandbank been freed on trial
for fraud. Of course you're seeing Israel cracking down on some finance accounts related to
Hamas. I mean there are still there are still bad and dark applications of this cryptocurrency
and I wonder if you just think institutional investors are done. They think of it as a method
for terrorist financing or just for fraud. I think that the liabilities are the early crypto
cowboys, the crypto tokens that run registered securities, the unreliable crypto custodians.
For the industry to move to the next level we need to migrate to adult supervision. We're going to
need big banks to become the crypto custodians. We're going to need Wall Street to take a role and
we need to rationalize away from the hundred thousand crypto tokens you know yo-yo coins that people
are manipulating to Bitcoin. Bitcoin is an asset without an issuer. It is the one universally
recognized protocol that's a commodity in the space. So when banks on Wall Street and responsible
custodians are managing Bitcoin and the industry takes its eyes away from all of the shiny little
tokens that have distracted and and demolished shareholder value I think the industry moves to
the next level and we 10x from here. Michael Taylor thanks for coming on to talk about it.
Always with people. Thanks for having me.