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To Saylor, the Big Slide 'Feels Like Nothing'

By Mark Leibovich
Washington Post Staff Writer
Tuesday, March 21, 2000; Page E01

Washington's $10 billion man became a $3.9 billion man in a few brutal hours of stock trading yesterday.

Michael Saylor, the brash chief executive of MicroStrategy Inc., saw his company's shares free-fall from $226 to $86.75 after the Vienna-based software maker said it would change how it records sales--forcing it to restate two years of financial results. It was one of most dramatic one-day losses of wealth in history.

"It feels like nothing, actually," the 35-year-old Saylor said in an interview. It was not long ago, he said, that his net worth was a mere $300 million--shortly after MicroStrategy's initial public stock offering in June 1998. Before that, he wasn't even in the single-digit millions.

"What am I supposed to think?" he added. He said he plans to be leading the company for at least the next 20 years. And since he owns 55.7 percent of the shares outstanding--which were valued at $13.6 billion on March 10, when MicroStrategy hit its high of $313--no one can tell him he can't.

Saylor has become an icon of the region's transformation into a "new economy" hotbed. He's a hyper-ambitious man prone to big proclamations, grandiose ideas and lavish parties. In January, he rented out FedEx Field for a company-wide Super Bowl bash (shortly after 1,600 employees returned from their annual Caribbean cruise). He recently wrote commentaries in The Washington Post and Wall Street Journal. Last week, he announced his plan to spend $100 million to start an online university.

His ambitions for his company are equally grand. MicroStrategy's software helps businesses make sense of their vast databases of information. It allows large corporations such as McDonald's to figure out how many Big Macs they are selling in Dallas compared with Detroit--and how they can market accordingly.

More recently, the company launched an array of services to provide instant information to individuals over wireless digital devices. Ameritrade, the online stockbroker, uses MicroStrategy's software to deliver instant stock market information to 500,000 customers. An Ameritrade user might ask to be paged as soon as, say, shares of Yahoo drop below $200. Or when an equity analyst issues a new recommendation.

When large databases become more available, Saylor envisions a day where a local police department can instantly inform a person when a convicted felon moves into a neighborhood. This free flow of information that MicroStrategy wants to make possible has made it a target of criticism from computer privacy activists.

But Saylor, undeterred, said he hopes to disseminate instant information "like water," to a point where the company "purges ignorance from the planet."

MicroStrategy is announcing new contracts at a steady clip. What caused the dramatic change in its outlook for revenue was its decision to stop a controversial practice of recognizing much of the revenue from its contracts at the beginning of their term, rather than spreading it out over their lifetime.

Like many of the dot-com chief executives who are closely associated with their firm, Saylor has a loyal, cultish following. Yesterday's sell-off gave his naysayers a chance to gloat.

"Saylor's first e-University course will not be accounting 101," one investor quipped on a Yahoo investor message board. Another dubbed yesterday a "Microtragedy," while another declared "Mikey" to be "a publicity hungry, power crazed megalomaniac."

"For guys who are naturally cynical, there's going to be a natural reaction like this," Saylor said. He said he does not regret his growing public persona or his huge aspirations. "We've said we don't want to be some podunk software company that does nothing."

Still, the level of invective toward Saylor is an object lesson in how big personalities can make big targets.

"It's okay to be brash, but you have to keep being good," said Mario Morino, the former chairman of Legent Software, and a guru to many local technology entrepreneurs.

"If you go back 100 years, people have always rose way up and fallen back down," said Michael Maccoby, a Washington psychoanalyst, anthropologist and a historian of business leaders. Caesar and Napoleon had some rotten days, too, he said. In today's hyperspeed world, the cycle of huge victories and losses are accelerated.

Sometimes, Maccoby said, "people who want to change the world and have bigs ideas don't pay any attention to certain realities--like accounting."

In meetings with his executive team yesterday, Saylor said he felt "less stress in the room" than he did last week, now that the company's accounting adjustments have been aired publicly.

And, curiously, MicroStrategy Chief Operating Officer Sanju Bansal described the mood at the company yesterday as "unexplainably buoyant."

"Maybe I went through all the internalization of what this [announcement means] over the weekend," said Bansal, a MicroStrategy co-founder who met Saylor during their undergraduate days at the Massachusetts Institute of Technology. Bansal's shares lost about $1.45 billion in value yesterday.

"I expected people to be unbelievably unhappy and concerned here today," Bansal said. He said the employees seemed as focused as ever, adding, "I hope they're not posting to the chat boards."

Saylor spent yesterday in a procession of media appearances. He said that he welcomes the attention, even on bad days, and that his very public persona and gestures help differentiate MicroStrategy from "clutter" of so many high-tech companies vying for attention. And he says he's not backing off his plans for an online university.

"I think Michael's friend's are a little concerned for him," said Mark Warner, the managing director of Columbia Capital, an Alexandria-based investment and venture-capital firm. He is referring to Saylor's bold pronouncements and all the publicity and vulnerability that can bring. "But we also know that he can take care of himself."

© Copyright 2000 The Washington Post Company

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