Micro-strategy buying coins to manipulate public opinion? Analysts reveal Saylor's dark history of dot-com bubble fraud

Analyst Jacob King questioned MicroStrategy’s recent purchase of 10,624 Bitcoins (approximately $10 billion), claiming that the move had a perceived impact but had no real impact. King pointed out that this acquisition is more of a manipulation of public opinion. He reiterated Saylor’s settlement agreement with the SEC during the dot-com bubble, when Saylor paid $830k for falsely reported income.

The history of the dot-com bubble has been re-examined

! Micro-Tactic Ponzi Scheme

(Source: Jacob King)

King cited Saylor’s history during the dot-com bubble, noting that Saylor settled with the U.S. Securities and Exchange Commission (SEC) in 2000 for misreporting revenue. He reported that Saylor paid $830k to settle the allegations. King believes that this perception is the same as it was in the past. He asserts that this trend is evident from a historical perspective. Critics use this as an argument to question the current operating model of microstrategies.

Microstrategy during the dot-com bubble is a classic case of accounting scandal. The company falsely reported revenue between 1999 and 2000, recognizing future revenue as current revenue in advance, making the financial report look much better than it actually is. This operation was revealed after the dot-com bubble burst, and the SEC charged Saylor and other executives with securities fraud. Saylor personally paid $830k in fines, and the company paid additional fines, causing the stock price to plummet by more than 99% from its highs.

King believes that this historical pattern is repeating itself. Back then, Saylor created the illusion of rapid growth of the company by falsely reporting revenue, but now it is making a high-profile announcement to buy Bitcoin to create the illusion of strong demand. What they have in common is that they are both perceptual manipulation rather than substantive change. Meanwhile, Saylor’s advocates justify his achievements, citing his shift to Bitcoin. They claim that historical events should not overshadow current success, and MicroStrategy has since become a significant shareholder in Bitcoin.

The analysts added more context. They argue that Saylor’s resurgence after the company’s collapse makes the situation King described even more controversial. His remarks have reignited debates about Saylor’s credibility, with the crypto community divided into two camps, supporters and skeptics.

Why OTC Transactions Don’t Affect Market Prices

The analyst explained why the market was not affected by the acquisition. They noted that microstrategies are purchased over-the-counter (OTC) bitcoins. They stated that there was no exchange slippage in OTC trading, and the market sentiment was generally bearish at the time. Since November 25, the price of Bitcoin has fallen by more than 26% (from about $126,000 to $93,000). Global liquidity was tight during the quarter, central banks maintained tight policies, and investors reduced their investments in speculative assets.

Three major differences between OTC trading and exchange buying

Zero Price Impact: OTC trading occurs outside of the exchange’s order book and does not drive up market prices or cause slippage

Different sources of liquidity: OTC is usually provided by miners, early holders, or other institutions, and these sellers do not sell on exchanges

Market Signal Distortion: Publicly announcing the purchase of $1 billion under the illusion of strong manufacturing demand, but in reality not sucking any circulating supply from the market

This macro pressure negates any possible upside effects. The analyst also mentions the reflexivity theory, which illustrates how market perception influences market cycles. They observed that microstrategies tend to exaggerate news by making major announcements. Their argument is that the market only reacts during a bull cycle. This time, the market environment did not show any upward momentum.

King’s post has sparked heated discussions in crypto circles. Many followers question the purpose of the acquisition, while others argue that MicroStrategy remains one of Bitcoin’s staunchest long-term supporters. This divergence has intensified as market participants see price fluctuations. Bitcoin continued to be under pressure at the time, further shaking trust in the significance of the acquisition as the market continued to decline in this high-profile acquisition.

Balance Sheet Risk and the Selling Ghost

The financial health of microstrategies also comes into focus. Analysts noted that the company’s Bitcoin holdings have exceeded $600M, while its market capitalization is around $540M. They see this market capitalization imbalance as a risk factor, indicating that the market values the company below the value of its holdings. This discounted state is extremely rare in the DAT model, as investors have historically been willing to pay a premium for the microstrategy’s sustained buying power.

Recently, CEO Phong Le has said that MicroStrategy has the potential to sell Bitcoin. King cited this as an excuse, arguing that the company’s Bitcoin strategy was under pressure. This statement is extremely rare in the history of microstrategy, as Saylor has always emphasized the stance of “never selling coins”. The CEO’s let-go may reflect concerns within the company about the sustainability of the current strategy.

Commentators question whether microstrategies can hold Bitcoin for the long term. The company is currently saddled with about $80M in debt, and while leverage is relatively low, debt pressure may force the company to reevaluate its strategy as Bitcoin prices continue to fall. If Bitcoin falls below $70,000, the company’s net worth will shrink significantly, potentially triggering risk scrutiny or tightening financing conditions for creditors.

Market observers are poised for a more intense discussion about the company’s Bitcoin strategy. King’s remarks came at the right time to bring the discussion to a climax, forcing the market to revisit the sustainability of the microstrategy model. The shift from a 700% premium to an 11% discount is already the clearest market signal: investors no longer believe the story.