Jacob King Challenges MicroStrategy’s Bitcoin Strategy
Key Takeaways
- Jacob King challenges Michael Saylor and MicroStrategy on their recent Bitcoin purchase.
- King made use of a historic perspective that gave rise to a heated debate among the industry’s investors. The dot-com bubble was at the center of the debate.
- Critics of Saylor came in as support for King’s arguments by focusing solely on the dot-com bubble and Saylor’s past. Industry analysts, however, took a more conservative approach and weighed both sides of the argument.
- The balance sheet of MicroStrategy was also taken into question by Jacob King. King argued that there were huge discrepancies in MicroStrategy’s balance sheet, once again making a reference to the financial misconduct of Saylor back in the year 2000.
CEO of SwanDesk and famed Financial Analyst Jacob King has challenged MicroStrategy’s Bitcoin reserve strategy. A recent purchase where MicroStrategy bought 10,000 Bitcoins has sparked a feud between Michael Saylor, co-founder of MicroStrategy, and Jacob King. Jacob King is a famed Bitcoin skeptic and a financial analyst who has always warned investors against investing in Bitcoin. Jacob King has always considered Bitcoin a bubble and not worthy of being titled as an asset.
In his recent feud, King has taken a swipe at MicroStrategy and Michael Saylor by challenging the strategy that MicroStrategy is following at the moment. King openly voiced his dispute against the recent 10K Bitcoins. He argues that Michael Saylor is more of a perceptive person than being accumulative. King has referred to years’ worth of Saylor’s corporate history to back up his argument.
The Dot-Com Bubble And Michael Saylor’s MicroStrategy
It is not the first time that MicroStrategy has been put under scrutiny by critics. In the period from 1998-1999, MicroStrategy had its yearly portfolio manipulated by disguising the income from certain software licenses. The Securities and Exchange Commission had made a crackdown on MicroStrategy regarding this matter.
Following this incident, the share value of MicroStrategy went down by 62% in a single day, and the event was recorded in history as the dot-com bubble. The then CFO and COO of MicroStrategy, Michael Saylor, had taken a serious brunt of the fall, losing nearly 6 billion US dollars of his net worth in the year 2000. In addition to this, Saylor had to pay a fine of $350,000 to the SEC and an additional 8.3 million US dollars as a personal disgorgement.
Jacob King has used the dot-com bubble as a reminder to make a dig at Michael Saylor and MicroStrategy regarding the recent Bitcoin purchase. The financial misrepresentation was a stain on Michael Saylor’s reputation, and it came to haunt him after a quarter of a decade through Jacob King.
Critics Defend King Using The Dot-Com Bubble, While Fans Defend Saylor
The dot-com bubble was used as a tool to defend Jacob King’s inference about MicroStrategy’s extensive Bitcoin reserve strategy. King refers to Bitcoin itself as a bubble and points to Saylor’s history as a valid reason for having doubts about the current valuation of MicroStrategy.
According to King, Saylor’s, and thereby MicroStrategy’s perception remains aligned with the historical context, and thereby it is inherently dangerous. King’s attack on MicroStrategy was mostly made through a historic perspective, and fans of MicroStrategy and Michael Saylor had a different take on the matter. They argued that digging into the past was in no manner an amicable way to justify King’s criticism of MicroStrategy. The reference to dot-com only intensified the debate, as there was a situation where a strong juxtaposition occurred. This happened because, post his embarrassing dot-com bubble, Michael Saylor was able to bring MicroStrategy afloat again. Analysts pointed out that it was indeed a commendable act and that taking a Bitcoin-focused strategy cannot be completely written off as a bubble.
Adding to this argument came King’s own personal hatred towards Bitcoin. Fans of Saylor argued that King was simply following in the footsteps of Peter Schiff and undermining MicroStrategy without much concrete evidence. King faced more backlash since he had made a reference to the original bubble.
The Purchase & MicroStrategy’s Balance Sheet
King’s argument did include the problems that plagued MicroStrategy’s balance sheet. The major problem highlighted by King was that MicroStrategy’s Bitcoin holdings have far surpassed a logical amount and reached over 60 billion US dollars. This, according to King, was not an ethical strategy, as MicroStrategy is on the verge of becoming delisted if Bitcoin’s price drops further.
In addition to this, King pointed out the discrepancy that the company’s Bitcoin valuation stands at 60 billion US dollars, while the market value of the company amounts only to 54 billion US dollars. This was once again a reference to the financial misconduct of the year 2000 and the dot-com era.
Conclusion
Whether Saylor’s long-term strategy will reward him or will it become yet another bubble is a question whose answer lies in the value of Bitcoin itself. MicroStrategy, with nearly 60 billion US dollars worth of Bitcoin, is in dangerous waters. To add to this dilemma, industry’s top financial analysts like King and veteran investors like Schiff are in hot pursuit of Saylor’s strategy.
This battle between Saylor and the industry’s Bitcoin skeptics has been going on for a long time now. As the corporate battles are both won and lost from time to time, the important question is who will win the war.
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Crypto & Blockchain Expert