MICHAEL J. SAYLOR – Why Bitcoin Is The Apex Property Of The Human Race & How To Profit From Crypto

– Where are you gonna put your money? Big tech is not like the
compelling new thing, it's the understood thing. My strategy as a tech investor, Brian is, you buy something that
everybody in the world needs, nobody can stop, and 99% of
the world doesn't understand. – And you have also become
probably the most famous Bitcoin evangelist in
the world in the process and been embraced by the community. What's that been like for you? Because that's a transformation. – If you wanted to get an
education and erudition to five billion people, you can't do it with MIT and Harvard and libraries and books and
teachers and professors.

You need to do it with digital
books and digital education. You need YouTube and iBooks. And that's why Google,
and that's why Apple are exploding in value. If you want to give wealth to
five billion people, Brian, you can't do it with gold, you can't do it with land, you can't do it with buildings, and you can't do it with
20th century stocks, you can't do with collectibles of art, you can't do it with diamonds. Those are 20th century property.

You can give 10% of the
people wealth that way. You can give 10 or 20% of
the people wealth with banks and stock exchanges. If you want to give five
billion people wealth, you need to give them digital property. You need to give them digital gold on an open monetary protocol
running on a $50 Android phone. And that's why I say
often Bitcoin is hope. (dramatic upbeat music) (upbeat pop music) – The world is changing. Inspiration is everywhere. It has never been so
easy to connect, share, and bring people together. We're learning from others and finding the best in ourselves. Challenging our beliefs, sharing our vulnerability, overcoming our fears. Transforming ourselves so
we can transform the world.

How far can we go? This is "London Real", I am
Brian Rose, my guest today is- (upbeat pop music) This is "London Real". I am Brian Rose. My guest today is Michael Saylor, the American entrepreneur,
technologist, author, business executive,
and Bitcoin evangelist. You are the CEO and Chairman of the business intelligence
company, MicroStrategy, which you co-founded in 1989 a few years after graduating
with a double major from MIT. You're the author of "The New
York Times" bestselling book, "The Mobile Wave, How Mobile Intelligence
Will Change Everything", which correctly predicted the sharp rise of technology giants, Amazon,
Apple, Facebook, and Google, while highlighting the impact
of mobile and social networks on global economic development.

You have described Bitcoin
as the apex property of the human race. And last year, you began
a massive investment drive that has seen MicroStrategy
purchase over 100,000 Bitcoin worth over $3 billion today. Michael, welcome to "London Real". – Thanks for having me, Brian. – Great to have you here. Before we get started, I you gotta ask you a couple
of questions about MIT. I got there in '89 so I missed
you by a couple of years. But it's a very special place. And I still remember walking through that front door of Lobby 7
and looking up at the dome. And even though I was this punk kid I still somehow felt honoured to be there.

And I think it changed me in so many ways. Some I don't think I'll
ever really understand. I also had a fraternity experience there, which was a really important
of my evolution as well as kind of like a man. Just curious what the
experience was like for you. And what was it like as an
18 year old kid from Ohio going to Boston, Cambridge
and go into a place like MIT? – Well, it was definitely a very very, maybe the most important
formative experience of my life. If I think about the
impact that had on me, when I graduated from high
school, I was the valedictorian. When I got to MIT, I was
one of 400 valedictorians. Every single person at MIT was the biggest overachiever
in their various community. And so, it was interesting
to be surrounded by so many overachievers. Also, I came from a middle
class family and a public school and I came in contact
with a lot of children from upper-class families
and private schools. And they had had two years of calculus or they had two years, one to
two years of college education before they showed up and we were just going to college.

So I saw people from every class. I saw, I think out of my
nine fraternity brothers there were like six or seven Eagle Scouts, it got to be kind of silly. And then I saw people from
everywhere in the world. So MIT brought together
global elite overachievers. That was interesting. I think the other thing
that was interesting was MIT had this ethos of do it
yourself, think for yourself and be fearless. So they would give me a
very difficult problem and they expect you to solve the problem from first principles and they gave you the tools to do it. I think the third thing I saw was I had some of the most
brilliant fraternity brothers. They're the kind of guys that, I mean 18 year old, 19 year olds, and they're the kind
of guys that get bored, then somebody took the car apart
put it back together again. One of the them took
cars apart for a living and put it back together again.

The other one had launched
computer software gaming company while he was in high school and launched a "Pac-Man" knock off successful enough to get cease
and desist letter from Atari. And so, you just saw all
these examples of excellence and it gave me a lot of confidence. I think that's what I
took from MIT, confidence. – And that fraternity experience. I mean, how can you
describe that to someone? Because I think it's
so often misunderstood. I bet it doesn't even
necessarily exist anymore the way we knew it. But for me it was so important. I spent four years
living in my fraternity. I never lived in any other public housing. I grew up, like you said, with people from all over
the world, different classes. There were the guys that
couldn't afford pizza and the guys that could afford pizza.

That was like the divide. But, what was that? Cause I know you co-founded MicroStrategy with one of your fraternity brothers. So what was that like? – It was, if you dumped a bunch of brilliant Eagle Scouts together into a house between the age of 18 and 22 and they all spontaneously
organised a government, then that's what a government
and ecosystem and a culture. That's what I saw at MIT. In retrospect, it's quite amazing. We ran our own finances. We ran our own work where
we would maintain the house. We had sophisticated everything. I mean, we had elections, we had a CFO, we had a Head of Maintenance, we had a Social Chairman.

And we orchestrated the most
elaborate social events, the most elaborate construction
development events, fundraising events, you
know about rush week and all those events, trips. And you kind of took for
granted that a 20-year-old could run an elaborate
enterprise with due process. We had parliamentary procedure, we had house meetings, we had votes. We had all manner of intricacy. So it was a microcosm of the
world run by a bunch of people that were 12 to 36 months
out of high school. And looking at it today,
so many people expect big institutions to do everything for them but we were completely
self-reliant at the time. – Yeah, I'm having flashbacks. I mean, there were 50
of us at 233 Mass Ave. Average age 20, maximum age 22 or 23. Like we had to feed
ourselves, clean ourselves, social chair, everything, and then have a pledge class. So you had to go through that whole thing and put them through the
process of becoming brothers.

And we figured it out somehow. I mean, if my wife could see
some of the meals we served I mean, she would be shocked or the look of the kitchen on some days or the sticky carpets after a party. But there was something
beautiful about it as well, because we just got on with it and it did function somehow. So yeah, some good memories
flashing back here. And again, those lessons you
say about MIT, it's funny. Cause they don't tell you those things, but it's just this ethos of the place of here's the fire hose,
stick it in your mouth, figure it out. You will figure it out.

We're not gonna tell you how, but we're going to kind of
imply that you can do it. And so go. And yeah, I remember that too. So yeah, really, really
brilliant memories. Look, I wanna talk to
you about Bitcoin today. I wanna briefly tell you when
I first heard about Bitcoin, because it involves a friend of yours. In 2013, I was doing my show "London Real" after I quit my job in banking and I couldn't take it anymore.

And I had heard about
this thing called Bitcoin and I put out on Twitter, "Who's the one that can tell
me about this instrument?" And this one name came up in
London and it was Max Kaiser. And so after a couple of
tweets back and forth, as we called each other out
and sized each other up, Max showed up at my
kitchen here in Shoreditch. And I didn't know if we were
gonna have a fight or what, and we had a broadcast. And for 90 minutes, Max
schooled me on Bitcoin. And I think I just
bought two for 85 pounds. I was complaining. There was no market-makers,
the order book system. And Max really laid it out. And that was my first,
really, experience with it. And that episode is still up.
It's fascinating to watch now. And then I didn't know what
to do with it. And so in 2015, '17 and '19 Andreas Antonopoulos came back and would always tell us
about what was happening and what it could be
and the future of money. But again, it didn't hook me.

And it wasn't until this
year when I started looking at what was going on in DeFi, that I got reminded about what
I was doing on Wall Street in the '90s. And I thought, "Wow, this
is crazy because I used to do this 30 years ago
and now other people are". And we can talk about that stuff later. Tell me about your
experience with Bitcoin, because I know you knew
of it back in 2013, but I think it wasn't until the last year where you really saw it.

– In my professional life,
I've run MicroStrategy, which is an enterprise
software company for 30 years. And I'm a public company CEO. And most of my mental energy
was consumed by competing against Oracle and IBM
and Microsoft and SAP and selling enterprise
software to everybody on earth. Part of what I did was run a treasury. And our treasury at
MicroStrategy primarily consisted of a very conservative
conventional corporate strategy of hold cash and
short-dated sovereign debt. And that's what I did for a long time. And occasionally we would
take that treasury cash, we'd buy our own stock back. But we didn't pursue any other
investment agenda with it. In my private life, I
was a private investor. And there, I was a tech investor. I bought Apple, I bought Amazon, I bought Facebook, I bought Google. I wrote about why I bought
those things in the mobile wave. But the summary is the best
investment ideas of the century, I believe, are you buy
into a digital network that is dematerializing
a product, or a service, or some kind of idea in a
civilization, and you wait.

Facebook, dematerialized friendship and Apple dematerialized
everything you could hold in your hand, dematerialized wallets, and cameras, and photos. And Google dematerialized
information, and books, and video, and Amazon dematerialized storefronts. And so those digital networks
that dematerialized things, they grew through the web era. And we know that story. And then when the mobile era came along, all that software mobilised, and pretty soon you had a store
in your hand called Amazon, and you had a library in
your hand called iBooks, and you had friendship and relationships in your hand called Facebook, and you had a camera in your hand now, and probably every other mobile device, a tape recorder, like an Apple.

And I kind of rode that way for a decade. And in 2020, I knew Bitcoin was around. I knew some people used
Bitcoin for something or other. I also thought it was kind
of cool that you could go on markets and bet on who's
gonna win an election, if you remember that. And I thought online poker was cool. And I thought there were
a lot of things are cool, but I classified them as novelties. I classified Apple, Amazon, Facebook, Google as good investments
based on a digital network. And my professional
approach was I invested in short-dated treasuries. Then, March 2020 hit, the
money supply started expanding at three times the normal rate, we had lockdowns, which
shut down main street, and we had a V-shaped
recovery in Wall Street.

And so between March and June, as I watched Wall Street recover, and if you look at the
S&P index and stock market for the past 12 months, it's just straight up and to the right. It's like there is no crisis. And if you're living on main street, main street hasn't recovered. I mean, the, the cruise
lines aren't up and running, the airlines have been impaired, the hotels are impaired. Lots of manufacturing
business are struggling. There's rampant problems
in getting labour, there's rampant supply chain issues, and there are shortages. And so that dichotomy between
the recovery of Wall Street and the impairment of
main street caused me to question my premises about money. I started by questioning my
premises about treasury policy.

Brian, I had $550 million in cash, and it was yielding 0% interest. And when the Fed said,
we're not even thinking about thinking about
raising interest rates, the message was for the next four years, you'll get 0% interest on $500
million and you'll like it. Well, then I started thinking, then I watch Wall Street recover. And if the S&P, if we actually look at at
S&P performance over the last 12 months, it's up 37%, Brian. And so if you had a billion dollars and you held it in cash, you're up 0%. And if you held it in
S&P index, you're up 37%. If you took the same
billion dollars of cash and you bought gold, you're
up minus 72 basis points, that is you're up 0%. If you invested in
Bitcoin, you're up 269%. So what is the message that the
world is trying to tell you? It's that we expanded the money supply.

If your long-term savings
strategy is put your money in a bank account as dollars or euros, then your money lost, call it
37% of its purchasing power. If you put your money
into an ETF or S&P index, your money held its purchasing power. If you put your money into Bitcoin, it gained purchasing power. And so as a corporate fiduciary, I got half a billion dollars. What am I gonna do? Well, I don't wanna hold it in cash when I know that the
currency is being devalued and the interest rate is zero. That's a negative real yield. If you count negative
real yield based on CPI, you might say to yourself, oh, it's only minus 2% negative
real yield or minus, the CPI now is like 5%,
minus 5% negative real yield. But if you calculate inflation
based upon asset inflation, the asset inflation rate for a portfolio of companies is 37%. So your negative real yield is minus 37%. And the rule of 72 tells you
that you lose half your money in two years at that rate.
– Wow.

– You lose 90% of your money in 10 years. So when the negative real
yield got to minus 37%, Brian, it's kind of like
you crank the temperature up in my hot tub to 250
degrees, and I jumped out. So, how did I discover Bitcoin? The answer is it wasn't the problem for me until March of 2020,
it was an opportunity, but I had other opportunities. And it wasn't the clear enough opportunity that I would change my life
in order to go do this thing. But in March of 2020, the big
tech trade came to its end. Amazon was $3,200 a share. Well, I wrote it from $300
a share to $3,200 a share. It wasn't gonna go up by a
factor of 10 or 20 from there. Apple, Amazon, Facebook, and Google were acknowledged
digital monopolies and dominant networks.

And every 22-year-old taxi
cab driver could have told you that those were the winners
by March to June of 2020. So, where are you gonna put your money? I mean, big tech is not, like,
the compelling new thing. It's the understood thing. My strategy as a tech investor, Brian, is you buy something that
everybody in the world needs, nobody can stop, and 99% of
the world doesn't understand. And that would be the
definition of Facebook in 2011 or 2012, or Google, or Amazon. If you go back to 2010, you could see Apple, Amazon, Facebook, Google are unstoppable. Everybody needs them. And yet, 98% of the people on Wall Street would have
told you when Apple doubles you should sell some, take off the top, and you should diversify
into HP and IBM and other.

And when technology is more
than 20% of your portfolio, you should sell technology
and you should diversify into non-technology. So the diversification in that
case is selling the winner to buy the losers. And of course the idiocy
is Apple became 150% of the profit of every mobile
phone company in the world. Everybody else in the world lost money to compete with Apple,
which made all the money. That's why you don't diversify
from the category killer. Amazon won, Walmart stayed,
was like the number two, and every other retailer in the world lost in that decade timeframe. So selling the winner to buy the losers within the sector doesn't make any sense. And there's a certain
arrogance and foolishness from a Wall Street investor that says you have too much tech exposure. You went to MIT.

I went to MIT. What I observed is every growth company in the history of the world, going back to the Carthaginians
versus the Romans, they were all tech companies. When the Romans beat the Carthaginians, they did it with technology. When Kraft, and Heinz, and Standard Oil, and Carnegie Steel, and Andrew Mellon, and the Aluminium Company
of America, when they won, they were technology companies, AT&T, General Electric
were technology companies, General Motors was a technology company. There was never such
thing as an entrepreneur that took a small thing and made it into a huge thing without technology. So it's only the third
generation of investors that have forgotten how the company was built, that think it's a non-technology company. So bottom line, when
something is no longer, when it's no longer disrupting the world, its growth slows down,
it becomes a monopoly, when I got to, to March, April of 2020, what I said was the big tech
trade is a crowded trade and holding cash is a foolish idea. Sovereign debt is no
longer a store of value. Bonds are broken, we're at
the end of a credit cycle, my stock was $90 a share.

I had $60 share in cash, Brian. So the entire company
was worth $30 a share. And the investors, when I
asked them, said cash is trash, give it back to us. And so I hit this existential crisis. I had to go study. I had a problem. I needed a solution and we
were gonna take one, two paths. We either had to give back all the capital and we would have had
30 to $60 a share worth of the stock in a company
with no capital base that was growing 0% a year, competing against Amazon,
Facebook, Apple, and Google. Good luck with that. Or we had to invest the money in something which was gonna hold value or create value on a monetary
inflation environment.

And so we did a search.
We considered gold. We considered tech stock. I already described what
I thought tech stock was a crowded trade. It was already done. Buying gold was a good
idea in the 19th century. In the 20th century, it's too slow, in the 21st century,
it's looking antiquated. Well, I said, I want something like gold, but I want gold, I want digital
gold on a big tech network. What if I could take a billion dollars of gold that weighs 30,000 pounds, what if I could take that,
dematerialize that gold so it moves at the speed of light? It weighs nothing. What if I wrapped it with an open protocol so I could programme it? And what if I could programme
my iPhone or my web server to do a million transactions a second on the block of digital gold, move it to the speed of light
and make it brilliant, smart? And then I plug Moore's law into it, and it just kept getting
smarter and faster and stronger. I mean, the secret to
everything that worked in the last 20 years, Google,
smarter, faster, stronger.

Google maps, it knows
which way the traffic goes, it knows there's a traffic jam, it routes you around the traffic jam, it'll talk to you, it'll
nearly drive your car for you. It's a better idea than Rand McNally maps. That's why Rand McNally's worth
50 million or 500 million, Google's worth 50 billion
with Google maps, right? That one thing, your iPhone's
smarter, faster, stronger. iBooks, smarter, faster, stronger. Apple Music, smarter, faster, stronger. So I thought, give me a
block of dematerialized gold on a big tech network that's
smarter, faster, stronger. Where do I find that?. Crypto. Crypto created digital
gold and Bitcoin is, in essence, digital gold
on a big tech network, but now it checked all my criteria. It's something everybody
in the world needs, nobody can stop, and nobody understands. In March of 2020, you could
say you got there early. Max Kaiser will tell you, yeah, you should have figured
it out back in 2013.

But the point is, by 2020,
it was a $200 billion thing. 99% of the world doesn't
really understand it. How do you understand digital property on an open monetary protocol
that's decentralised when there is no metaphor,
there is no analogy to it in the last 5,000 years? A new thing. Nobody understood it, everybody needs it. It's decentralised.
Nobody is gonna stop it. They might slow it down.
They might fight it. But that was the beautiful
triple check criteria. And I said, I have the
$500 million problem. I think I'm gonna buy me some. So that's how I discovered Bitcoin. And that's why it became
the most important thing in my world in the second quarter of 2020. – Did that process take you
days or weeks until you, I mean, was your brain like, was it a three-day thing where
you were like da, da, da, da, da, da, da, da, you're
getting excited about it and all of a sudden you're like, I know this is the right way. Or was it weeks before
you knew this was working? – The first five or six times
people mentioned it to me, I just dismissed it as
like, a risky, complicated, I knew it was cool.

I knew it was a cool thing,
a decentralised network. I knew other people were
passionate about it. I didn't have the problem. You kept tugging on my coat,
but I didn't have a problem. I'm like go away. I'm making a lot of
money on my Amazon stock. I'm making a lot of money on Apple. I'd have a problem in my business. Like before, if you had asked me, do you wanna meet via
Zoom in February of 2020, I was like, what is Zoom? If you said, can I work
from home? No, you're fired. What about remote work? No,
you come into the office. We meet face-to-face. If you'd asked me the
same question in April, I would have said, well,
of course, we use Zoom. We're standardised on it. We all do all work remote. We went from 10 million people on Zoom to 400 million people on Zoom
in four weeks or something.

The world accelerated its
digital transformation of sales, of marketing, et cetera. If I had gone into my board
of directors in February and said, I think we should
buy 500 million worth of Bitcoin, they would've
said, what is Bitcoin? You're out of your mind. You're crazy. The history of science is the
history of paradigm shifts. And the one thing you learn
when you study the history of science is paradigm shifts
come two reasons, two ways.

Either the old guard dies, everybody dies, and the new generation picks up the thing, or there's a war and you're gonna die if you don't actually learn a new thing. And so in the midst of a
life or death war situation then people have their minds open up and they embrace a new idea. That's the history. I could go through 5,000 years of history. I could tell you that people
that had paradigm shifts driven by war or driven by the
death of the old guard. We had a war on COVID and
we had a war on currency. The war on COVID locked
down the entire world, and the currency war, the response of the policy
makers was literally to declare war on the currency. The US currency had been devalued by, depending upon your metric, 20
to 35% in the last 12 months. But currency in other places, Argentina has got 85% inflation. The currency in Venezuela,
they're collapsing 60, 70, 80%. And so what you have is a
devaluation of currency.

The war on currency means we're squeezing all the economic
energy out of the currency. And where does it go? Well, it goes into bonds, and then everybody held
bonds as a store of value, sells their bonds and they
move their money into equities and into real estate. And so you're seeing
monetary energy surging from the currency, to the bonds, to the equity, to the real
estate, to collectibles, to cryptocurrencies, to meme stocks. That was the war. So how long did it take
me to figure it out? Well, after March, I mean, the first thing we do is
we deal with the lockdowns, and you've got an immediate issue at hand. You've got thousands and
thousands of employees and customers you got to take care of. And how do you rewire the business in a world where the office is closed and you're operating remotely? That took of half, a lot of Q2. And at the same time, as I'm studying my operational problem, and I'm basically doing
a digital transformation of a 2,000-person software company, I actually started thinking
about the transformation, in this case, the digital transformation of my balance sheet.

And I would say, it
takes 10 hours of study to start to get an inkling
of what's going on. It takes a hundred hours to
start to be reasonably versed in what's happening here. And it takes a thousand
hours for a reasonable person to have a fair grasp of everything. If you wanna be the ultimate master, you need 10,000 hours before
you're comfortable laying on a billion dollar position, you need to probably have a thousand hours before I convince you to
risk huge amounts of money, you probably need a hundred hours. And before you can ask me
an intelligent question, you need 10 hours. So that's the path that we went down.

– Was it hard to sell to your board? Were you concerned because
you were a public company? And then, did you expect
more CEOs to follow? I know you talked Elon into
it and we can get into that, but were those other two issues, and did you have some
trepidation when you went in? – You know what? We had a lot of trepidation. I mean, there was a lot of
trepidation in the year 2020, for a lot of people, right? In every single business
across every dimension and every aspect of life, and we're still working
through those issues today. We will be for probably a
number of years to come. The process was, first,
me educating myself. So I went through those
Andreas Antonopoulos videos. I read "The Internet of Money". Then I read "The Bitcoin Standard". Then I started binge-watching
every other Bitcoin podcast, crypto currency analysis, started reading The
Bullish Case for Bitcoin", reading every essay I
could find on the internet.

You can learn a lot on the internet. You can learn a lot on YouTube. I figured out pretty quickly
I could speed everything up to 150% and speed listen while I'm, so you're speed listening
while you're eating dinner and you're absorbing a lot. Once you do that, you realise
that you don't wanna go back to like taking a one or
two-hour lecture a week over the course of a semester, just like people binge watch Netflix, a television series on a weekend, you start binge-watching
30 hours of podcast at 150% speed with a
little bit of skipping, and you find that in 10 hours, you can cover a semester of content. So I did a lot of that. Once I got myself comfortable, then I put together a
summary of materials, like, four hours of
videos and 10 documents or something like that
I sent all the officers and directors of my company.

Then, I started meeting
with them individually. Then, we started on in group meetings. We got educated. Then, we split up and then
the general council went off to do the legal review
with our outside counsel and to retain other counsel. The CFO went off to do the accounting and the financial review
with outside auditors and finance experts. And the board did their research. And then we came to a very
elaborate process, Brian. We couldn't just buy
500 million of Bitcoin and put out a press release. We're a publicly-traded company.

So the first thing we do
is we have a deliberation. And the conclusion is we're gonna actually buy $250
million worth of something. And we're going to buy back
$250 million worth of our stock. So the first press release
and the first announcement is we've decided that we're
going to invest $250 million of our capital and treasury asset or mixture of treasury assets. This may include stocks,
bonds, real estate, gold, silver, Bitcoin, or cryptocurrencies,
something like that. We let the market think about that. We also said, we're gonna
buy back $250 million worth of our own stock over the next 12 months. We announced the share buy back programme. Stock is $120 a share. Let me put that in perspective. It's a $500 million company
with $600 million in value to the enterprise at $600
million in value of cash. About 1.2 times revenue. At that point, we concluded
we're gonna generate a lot of cash flow. 70 to $90 million in cashflow a year. I mean, the digital transformation
of the operation meant we weren't gonna need capital
to grow the business.

We were gonna generate a lot of capital because the things that were expensive, like throwing trade shows, and
flying around on aeroplanes , and staying in hotels, and spending money on
all this advertising, that just all went away. So, we knew we're gonna generate cash. We know we didn't need the cash. We announced this,
generally, to the public. Crickets, Stock trades 20,000 shares a
day, nobody really notices. They don't care. One week later, we went to
stage two where we said, okay, well, we've gone
through our analysis. We decided to buy 250
million worth of Bitcoin. We did it. Here's the announcement. And we're also announcing
a Dutch tender offer. We're gonna buy back $259
worth of our stock in 20 days. And you can tender your
shares for up to $140 a share. So in essence, the message is, if you don't like the Bitcoin strategy, this is your chance to get
off the roller coaster, and you can get off with profit. You can sell your shares
back to us at $140 a share.

Our stock is trading 121,
122 when we announced that. You got 20 days to think about it. So the idea is don't surprise anybody. I don't wanna tell you,
figure out what Bitcoin is and you got five minutes, right? That creates anxiety. You can't
figure out in five minutes. The company has embarked on a novel, new balance sheet strategy. And we're gonna give you 20
days to figure out whether you're gonna buy more, sell,
or hold your current position. And should you decide you want out, the company is gonna backstop you. We're gonna buy the first
$250 million worth of stock at a premium. So the market trades. First it trades into the 130s. Then they think about it a bit. Then it trades up past
140 and maybe past 150.

Okay, so you've got kind of a put. You can put the stock back
to the company at 140. You would think it would
trade at least to 140. For 20 days, the shareholder base rotates. We want them to rotate. If you hate it, we want you to sell. If you love it, we want you to buy. At the end of the tender period, we don't know what's gonna happen. We could have had $259 tender,
we could have non-tender. We had about $60 million
worth of shares tendered. Okay, so we buy back $60
million worth of shares at $140 a share. Then we have $175 million in extra cash. We think about it. We have a board meeting. We adopt Bitcoin as our
treasury reserve strategy, our treasury reserve asset. So the next message to the market is, MicroStrategy is adopting Bitcoin as a treasury reserve asset. If we have access capital
from time to time, we're going to convert into Bitcoin.

Let the market think about that. Shortly thereafter, we bought 175 million
worth of more Bitcoin. Now, we bought 425
million worth of Bitcoin. Well, the people that
are shareholder basis, you're not you either
like, are you long Bitcoin, or are you short Bitcoin, or
are you a neutral Bitcoin? We don't have to convince everybody. We just have to be
transparent with a group of people that happen to like Bitcoin. And maybe you could say, I just got to convince anybody, right? Like, I'm not trying to convince 100% of the people that they
should love Bitcoin. I'm just trying to find
the 1% that like Bitcoin, and then act with
transparency and integrity and offer them a publicly-traded company where they could invest
in such a strategy. So at that point, we had 425
million worth of Bitcoin. We started to communicate why we did it. We thought it's digital gold. It's smarter, faster, stronger
than traditional gold. And it offers a monetary inflation edge. The world starts to digest
that, our stock trades up, Bitcoin trades up. At some point, our stock trades up to 200, then it trades up to 250.

Then people discover, maybe this is good I get to own Bitcoin. Bitcoin. We buy the Bitcoin. The first thing we bought,
it was like 11,800. People are like, you're crazy. You're taking all this risk. It traded down to 10,000,
we bought some more. They thought you're double crazy. We took the risk. I'm like, I don't think I'm crazy. I think I'm, well, what are you gonna do if it trades up or down? And the answer is, I'm not a speculator. I'm not a trader. I don't care
whether it trades up or down. I'm holding it. They're like, well, how
long are you gonna hold it? Forever. Like, I'm holding it
forever. It's property. I mean, a decade, you want a timeframe? A decade we can mark it.

I mean, short timeframe is four years to figure out whether it worked
out in the short time frame. Well, mid timeframe is a decade. Reasonable timeframe is a hundred years. That's why we bought it. People thought that was kind of crazy. Like, are you speculating?
No, I'm not speculating. Okay. It takes a while. People don't, they don't
quite figure it out. At some point, our stock traded up. Well, all of a sudden our stock
trades up to a 10-year high.

We keep making money. Our employees like
exercising stock options. So we make more money. We have more cash. We go buy $50 million worth more Bitcoin. I think we buy another 75
million worth of Bitcoin. Now we bought 500
million worth of Bitcoin. Bitcoin doubles. We've made $500 million.
The stock has doubled. At that point, the stock
gets the $300 a share. It's best in a decade. We go to the market and we
offer to sell $400 million of a convert bond. The market loves the
idea of a convert bond. Okay. Here's the idea. We're gonna basically raise $400 million. We're gonna buy Bitcoin with it. If Bitcoin goes down,
you still got the bond. If Bitcoin goes up, you've
got the upside of Bitcoin. Where else can I buy a Bitcoin bond that makes me money if Bitcoin goes up and doesn't lose me money
if Bitcoin goes down? I've got a software
company sitting behind it. Okay. People wanted to buy that bond.

We were, like, quadruple over subscribed. So we raised the bond from
400 million to 650 million. We paid 75 basis points in interest. We borrowed $650 million
at less than 1% interest. We bought Bitcoin. We bought the Bitcoin around
20,000. The coin kept going up. That bond was the best performing bond in the year in the US. No one had a better bond. Okay. At this point, people are starting to think that MicroStrategy likes Bitcoin. Bitcoin keeps going up. MicroStrategy stock goes to 1,000.

When it gets to 1,000, we go back to the market and offer
a $600 million bond between zero and 50 basis points yield, 37 to 50% premium. The bond's oversubscribed. We make that bond a one
billion, $50 million bond. We sell it at a 50% premium. (serious music) – [Brian] To continue watching the rest of the episode for free, visit
our website, londonreal.tv, or click the link in
the description below..

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