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Crypto, cults and image makeovers
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Captain Blackadder: There was one tiny flaw in the plan.
Lieutenant George: Oh, what was that?
Captain Blackadder: It was bollocks.
Ponzi schemes generally have one cult leader. The crypto industry has many, whether FTX's founder Sam Bankman-Fried, Binance's CEO Changpeng Zhao, or MicroStrategy's CEO Michael Saylor. These generals in turn have their spiritual - or rather, ethereal - leader in the form of the mysterious Satoshi Nakamoto, believed to be a pseudonym for the person or persons who invented bitcoin. When cult followers are feeling down as a result of the crypto collapse over the last seven months, they can generally rely on their leaders to provide solace in the form of an upbeat TV or magazine interview.
Up until August 2020 MicroStrategy Inc. was a struggling software company with sales of around US$100 million. Its CEO Michael Saylor then started buying bitcoins for the company, mostly with debt. At the peak of the market last year the company's bitcoin holdings were worth close to US$6 billion, dwarfing the software business and its meagre profit of US$3.4 million in the quarter ending 30 June 2020.
Below is the company's rather interesting-looking share price chart going back to June 1998 when it was listed - yes, this was just before the tech bubble burst.
If you visit the company's website you will see no obvious mention of its massive exposure to bitcoin, only a link in the bottom left corner of the homepage to a Bitcoin is Hope website - the company's statutory financial accounts that do of course detail its bitcoin holdings can be found on the main website's Investor Relations page. On the Bitcoin is Hope website, you'll find a load of TV interviews with Saylor on the subject of cryptocurrencies.
Whatever you think of Saylor's decision to turn MicroStrategy into a geared play on bitcoin, you have to admire his ability to up the ante on the personal image front. I don't know exactly what comes next but I can't get that tune - and that scene - at the end of the film Life of Brian out of my head.
From Michael Saylor's Wikipedia entry:
When bitcoin was rising:
Joe Raedle/Getty Images
Michael Saylor's new Twitter account profile picture:
Source: Ethereum World News
The views expressed in this communication are those of Peter Elston at the time of writing and are subject to change without notice. They do not constitute investment advice and whilst all reasonable efforts have been used to ensure the accuracy of the information contained in this communication, the reliability, completeness or accuracy of the content cannot be guaranteed. This communication provides information for professional use only and should not be relied upon by retail investors as the sole basis for investment.
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