Michael Saylor steps down as loss on bitcoin bet widens to $2 billion

abdelaziz Fathi

Bitcoin maximalist Michael Saylor is vacating his position as the chief executive officer of MicroStrategy, the business intelligence firm he co-founded 33 years ago.

Microstrategy CEO

According to a statement posted by MicroStrategy, Saylor will hold the role of executive chairman and chair of the board of directors to focus more on the company’s bitcoin acquisition strategy and related advocacy initiatives. Effective August 8, the company’s president and former chief financial officer Phong Le will assume the CEO role while keeping his current duties.

“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,” Saylor said.

The move comes as MicroStrategy had posted a cumulative impairment loss of nearly $2 billion on its cryptocurrency holdings. As of the end of 2022’s second quarter, the firm held about 129,699 bitcoins, which were acquired at an average price of nearly $30,700 per unit.

Under the US generally accepted accounting principles, or GAAP, the original cost of MicroStrategy’s digital assets was roughly $4 billion. But at the current price, the company’s bitcoins are worth less than $1.9 billion. This means that the Nasdaq-listed firm would make nearly $2.1 billion in loss if all BTC holdings are sold today.

MicroStrategy witnessed paper losses of $170.1 million and $918 million in the first and second quarters of 2022, respectively, from holding digital assets on its books. However, this loss is something that has not yet been realized as it just reflects a depreciation in fair market value in excess of the book value.

Shares of MicroStrategy have been trading under pressure amid strong sell-off in crypto markets and after crypto lender Celsius paused withdrawals and transfers, sparking concerns of contagion into the broader space.

MicroStrategy (NASDAQ:MSTR) stock was falling faster than the crypto’s price, just as it outpaced bitcoin’s climb last year. At one point, it fell as much as 30% in a single day and traded down at $145, its lowest point in more than 18 months. However, the stock rebounded in July and its price nearly doubled from where it had been a month earlier.

MicroStrategy lost nearly 65% of its value since its stock hit a record high above $1000 a year ago. Shares in the business intelligence specialist and cryptocurrency investor have seen a monumental 800% during the period between October 2020 and February 2021 as bitcoin climbed.

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