3 Days After Vitalik Calls Saylor a ‘Total Clown’, MicroStrategy Announces a New CEO

Based on what Nasdaq-listed business intelligence company MicroStrategy Inc. (NASDAQ: MSTR) announced on Tuesday (August 2), the firm will have a new CEO as of August 8.

It is worth remembering that on 11 August 2020, MicroStrategy announced via a press release that it had “purchased 21,454 bitcoins at an aggregate purchase price of $250 million” to use as a “primary treasury reserve asset.”

Michael Saylor (the company’s Co-Founder, Chairman, and CEO) said at the time:

Our decision to invest in Bitcoin at this time was driven in part by a confluence of macro factors affecting the economic and business landscape that we believe is creating long-term risks for our corporate treasury program ― risks that should be addressed proactively.

Since then MicroStrategy has continued to accumulate Bitcoin and its CEO has become one of Bitcoin’s most vocal advocates. MicroStrategy’s latest $BTC purchase, which Saylor tweeted about on June 29, means that the firm is now HODLing around 129,699 bitcoins, which were “acquired for ~$3.98 billion at an average price of ~$30,664 per bitcoin.”

Anyway, according to a report by CoinDesk, on Wednesday (July 27), Saylor, who is a self-confessed Bitcoin maximalist, spoke at a two-day crypto conference in Turkey — “Blockchain Economy Istanbul” — where he shared his thoughts on Ethereum.

The CoinDesk report mentioned that Saylor had “noted that he was speaking as an institutional investor and in that regard, one would ‘have to wait until the protocol is complete.’” Apparently, “he pointed out that Ethereum co-founder Vitalik Buterin said in a speech last week that Ethereum was 40% done and had laid out a roadmap of three to four years, which means the ‘protocol doesn’t look like it’s going to be completed or stable for another 36 months.’”

Regarding the soundness of Ethereum, Saylor said:

‘Technically sound’ means I need to see the protocol function for that thing after about five to 10 years. So we don’t know that, either. Right? Because if you are hard forking and changing it, every time you do a big upgrade, you introduce new attack surfaces…

“‘Ethically sound’ means I need to know that nobody could change [the protocol], which includes Vitalik. I need to know that no one at the Ethereum foundation, no individual can change the protocol because if they could change the protocol, it makes it a security and if it makes it a security, then it’s not going to become global money.

On July 12, during an appearance on YouTube series “Not Investment Advice“, Saylor said that the basis for U.S. securities laws was the bible (more specifically, the Old Testament):

Most of the crypto industry, it just went, fast broke things, lacking adult supervision. Very entrepreneurial and that works until it doesn’t work anymore. It’s pretty clear it’s not working anymore. And the next decade, you’re gonna have to have lawyers and accountants. I know people are saying, ‘well, I guess Celsius should have disclosed what they were doing’. You know who discloses what they’re doing? Publicly traded companies…

Just keep in mind: the basis of securities laws are biblical; they go back thousands of years, I mean, Hammurabi’s Code even. The basis of securities laws are ‘thou shalt not lie, cheat, or steal’. That’s the basis of the law. So saying ‘these are antiquated laws from 1933 that don’t apply to crypto’ that’s kind of a dead on arrival argument. The law is ‘don’t lie, cheat, or steal’. It’s just instantiated in different years and different places. And so, the future the industry is going to have to be based on an ethically sound foundation, a technically sound foundation, and an economically sound foundation.

And as you can tell, I think Bitcoin is economically, technically, and ethically sound. You’ve you’ve got a million reasons why. We could talk about it for thousands of hours. If you want to build a business in this industry, you need to be inspired by those three principles.

And the simple thing to do is just use Bitcoin as your token and then build on top of that monetary protocol and on top of that monetary asset, but if you’re not going to do that, you definitely have to think long and hard about the economic, ethical, and technical implications of what you’re doing.

This led Buterin to wonder out loud last Saturday (July 30) why Bitcoin maximalists like to choose as heroes “total clowns” like Michael Syalor:

Earlier today, MicroStrategy released its “Q2 2022 Financial Results“. The company’s press release about its latets quarterly earnings report announced that “as of August 8, 2022, Michael Saylor will assume the new role of Executive Chairman and Phong Le, the Company’s President, will also serve as the Company’s new Chief Executive Officer and as a member of the Board of Directors.” It also mentioned that “Mr. Saylor will remain the Chairman of the Board of Directors and an executive officer of the Company.”

The press release went on to say that “as Executive Chairman, Mr. Saylor will focus primarily on innovation and long-term corporate strategy, while continuing to provide oversight of the Company’s bitcoin acquisition strategy as head of the Board’s Investments Committee.”

Saylor had this to say about his new role at the company:

I believe that splitting the roles of Chairman and CEO will enable us to better pursue our two corporate strategies of acquiring and holding bitcoin and growing our enterprise analytics software business. As Executive Chairman I will be able to focus more on our bitcoin acquisition strategy and related bitcoin advocacy initiatives, while Phong will be empowered as CEO to manage overall corporate operations.

And Le stated:

I’m honored and excited to continue leading this truly innovative organization, as President & CEO. Our people and our brand carry incredible momentum. I would like to reinforce our commitment to our customers, shareholders, partners and employees, and I look forward to leading the organization for the long-term health and growth of our enterprise software and bitcoin acquisition strategies.

The press release also talked about “Operating Expenses” and “Loss from Operations and Net Loss” for Q2 2022:

  • Operating Expenses: “Operating expenses for the second quarter of 2022 were $1.015 billion, a 96.5% increase compared to the second quarter of 2021. Operating expenses include impairment losses on MicroStrategy’s digital assets, which were $917.8 million during the second quarter of 2022, compared to $424.8 million in the second quarter of 2021.
  • Loss from Operations and Net Loss: “Loss from operations for the second quarter of 2022 was $918.1 million, compared to $414.2 million for the second quarter of 2021. Net loss for the second quarter of 2022 was $1.062 billion, or $94.01 per share on a diluted basis, as compared to $299.3 million, or $30.71 per share on a diluted basis, for the second quarter of 2021. Digital asset impairment charges of $917.8 million and $424.8 million for the second quarter of 2022 and 2021, respectively, were reflected in these amounts.

Here are a few reactions from the crypto community to the news about Saylor stepping down as CEO:

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