MicroStrategy‘s Michael Saylor is leaving his role as CEO to become Executive Chairman of the company, according to a statement released by the company on Tuesday afternoon. The company’s president, Phong Le, will take the reins from Saylor.
Saylor has been in the role of chief executive since launching the company in 1989. MicroStrategy went public in 1998.
MicroStrategy’s stock is down over 48% this year. Bitcoin is down over 51% during that same time period.
“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,” said Mr. Saylor in the release.
The announcement comes as the company announces its second quarter earnings, in which its total revenues dropped by 2.6% compared to a year ago.
MicroStrategy may technically be in the business of enterprise software and cloud-based services, but Saylor has said the publicly traded company doubles as the first and only bitcoin spot exchange-traded fund in the U.S.
“We’re kind of like your nonexistent spot ETF,” Saylor told CNBC on the sidelines of the Bitcoin 2022 conference in Miami in April.
So far, the Securities and Exchange Commission has only approved ETFs that track contracts speculating on the future price of bitcoin, instead of the cryptocurrency itself. The commission has refused to greenlight any of the formal applications for a pure-play bitcoin-based ETF — a financial instrument that would give investors the chance to invest in bitcoin without having to go through the motions of signing up for an exchange, opening a crypto wallet, or dealing with any of the other logistics involved with buying and holding bitcoin.
“If there was a spot ETF, you’d be paying a 1% fee, and it wouldn’t be leveraged. With MicroStrategy, we have a software company that generates cash flow, so we convert our cash flows into bitcoin,” said Saylor in April.
MicroStrategy has been adding bitcoin to its corporate balance sheet for the last two years. The company has now spent close to $4 billion acquiring bitcoin at an average price of $30,700.
MicroStrategy has used company debt to purchase bitcoin, and in March, Saylor decided to take another step toward normalizing bitcoin-backed finance when he borrowed $205 million using his bitcoin as collateral — to buy more of the cryptocurrency.
“We have $5 billion in collateral. We borrowed $200 million. So I’m not telling people to go out and take a highly leveraged loan. What I am doing, I think, is doing my best to lead the way and to normalize the bitcoin-backed financing industry,” said Saylor in April.
“As people realize they can borrow against something, then they realize they never have to sell it, and then they start to stretch their time horizon from — ‘It’s a 36-month speculation,’ to — ‘It’s a 36-year holding.'”
This post has been syndicated from a third-party source. View the original article here.