MicroStrategy

Twenty years ago, Virginia based Nasdaq listed MicroStrategy Incorporated was thought, along with many others, to be partly responsible for the Dotcom bubble bursting as, one day in March 2000, the shares collapsed 62% after restating [downgrading] its accounts in a shock announcement. Subsequently, they have never fully recovered their lofty valuation.

The share price history at that time was a low of $7, then peaked momentarily at $1400 per share in those few years and months of trading insanity at the turn of the 20th century 1999 - 2000.

Founded in 1989 by two exceptional students from MIT with a loan of $250,000 from Dupont, MicroStrategy produces software for business intelligence and data mining utilizing non-linear mathematics inspired by the course they were taking in systems dynamic theory at that time.

Today consumers appreciate and trust the continued independence of MicroStrategy. Its innovative edge in hyper-intelligence office and analytic solutions for cloud and mobile information drives. The future office mantra encompasses cybersecurity and mobile identity.

This is a company operating at the distant margins of the tech universe. Given its relative longevity, the continuing commitment of its founders, together with the possibility of a technological breakthrough, it makes an interesting investment.

Earnings increased stratospherically from 1990 to 1996, rising 100% in each year before the two founders deciding to publicly list in 1998.

Following the deflating of the dot-com bubble mania, the company settled down to 18 years of unexciting pedestrian price performance with the shares trading in a range between $100 to $200 and where they trade today at around $150, giving a market capitalization of $1.5 billion.

Finally, but importantly, at the end of August 2020, the company grabbed American financial headlines by committing its $500 million of cash holdings to Bitcoin by investing in the cryptocurrency, retaining only $50 million cash for work in progress within its business.

The stated reason given by founder Michael Saylor for this significant diversification and controversial application of corporate funds was the miserly return on US$ deposits and a growing distrust of the US dollar and fiat currencies generally, which he feels are due for an imminent and shocking reckoning.

Saylor went onto say he felt that precious metals were also good hedges as what he sees coming to the global economy.

Given the analytical mathematical models at the heart of the company that he has dedicated his life to, perhaps we should all be listening!