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It was the early hours before MicroStrategy’s IPO in 1998, but founder Michael Saylor wasn’t assuaging big investors or running through projections, or even putting champagne on ice.

Ensconced in a $10,000-a-night three-story rooftop suite at Manhattan’s Palace Hotel, he found his attention captured by something else entirely: the suite’s private elevator. He was so enthralled by the opulent toy that, according to a press account at the time, the young founder spent the early morning hours obsessively riding it up and down.

Indeed, when looking at Michael Saylor’s 33-year career, one gets the sense that the wild ups and downs don’t faze him at all. In fact, he may even be chasing them. At the NASDAQ later that morning, MicroStrategy’s stock popped 100% from the offering price to garner an almost $1 billion valuation. By the close, Saylor’s stake reached $540 million.

Years later, MicroStrategy would become ensnared in an accounting scandal that sent the stock plunging 62% in one day; Saylor lost $6 billion in personal wealth. His swift financial decline even turned him into an answer to the Trivial Pursuit question: “Who has lost the most money in a single day?”

Still, the entrepreneur persisted. He went on to offer a promising new product to Facebook, sell a cloud-based software platform he’d built in-house for over $100 million, pen a prophet bestseller on the mobile future, and collect multiple yachts, one of which starred in the wild party scene of an Entourage movie.

But Saylor’s most outrageous swing of all is one that’s playing out right now at MicroStrategy. Over the past two years he has essentially bet his entire $500 million revenue company on the future of Bitcoin. On August 2, the company announced Saylor would step down as CEO after three decades at the helm to take the role of executive chairman. In a statement, Saylor attested that the new job will enable him to focus “on our Bitcoin acquisition strategy and related Bitcoin advocacy initiatives.” (Given that Saylor controls the voting stock, and will stay on executive chairman, it’s certain the decision was his, though the company did not respond to several requests for interviews with Saylor.) In a surreal twist, though the company announced a gigantic writedown of $918 million on its Bitcoin holdings, MicroStrategy’s stock soared the day after the news hit, rising 15% to $321 and gaining over $400 million in market cap.

The jump deepens the mysterious mythology of Michael Saylor. Did Wall Street cheer because the bedrock software business will fare far better when Saylor, distracted by Bitcoin, isn’t running things day-to-day? Or does having him as a full-time crypto evangelist actually lift Bitcoin’s prospects and hence brighten MicroStrategy’s future?

Saylor’s journey from entrepreneur to evangelist has been controversial: “An Elon Junior without the business talent”

It all started with an innocuous tweet. On Aug. 11, 2020, Saylor reinvented himself and MicroStrategy overnight by grabbing the kind of earth-changing mega-idea he’d long been chasing: He announced on Twitter that MicroStrategy had “embarked on its Bitcoin strategy” by spending $250 million to buy 21,454 Bitcoin at less than $12,000 each. Back in 2013, Saylor had trashed Bitcoin, tweeting that “its days are numbered.” But during the early days of the pandemic, Saylor experienced an epiphany. MicroStrategy was accumulating tons of cash—and Saylor fretted that the Fed’s easy-money policies would severely erode his war chest’s value by eventually stoking inflation.

“We just had the awful realization we were sitting on top of an $500 million ice cube,” he recalled in an interview at the time. Saylor shared Bitcoin creator Satoshi Nakamoto’s view that central banks will inevitably debase fiat currencies. For Saylor, crypto’s limited supply made it a reliable, incorruptible “store of value” that was “superior to cash.” Saylor held seminars at MicroStrategy to convince his lieutenants of Bitcoin’s world-changing advances, and “cheerfully assigned them homework and learning exercises.”

By February of 2021, six months from his original purchase, Saylor announced that MicroStrategy wasn’t just deploying Bitcoin to preserve cash earned from selling software. It would henceforth reinvent itself as a hybrid that combined its traditional franchise and an arm that specializes in accumulating Bitcoin as a business, based on the conviction that its value will rise substantially over time, and that using the software cash flows and borrowing to buy Bitcoin could boost MicroStrategy’s stock much faster than reinvesting in the core business, buying back stock, or making acquisitions.

At this point MicroStrategy has borrowed a staggering $2.4 billion to buy Bitcoin, of which it now owns 129,699 at a current market value of $3.1 billion. To build its cache, MicroStrategy has borrowed the equivalent of three times its entire base of shareholders’ equity when the adventure began. It’s now primarily a vehicle for speculating in the lead crypto—as it runs an enterprise analytics arm on the side. And though he owns just one-fifth of MicroStrategy’s shares, those shares control 64% of the votes, hence he calls the shots.

But this wild experiment has proved so risky that, Fortune has learned, MicroStrategy was unable to obtain full insurance for its directors and officers (D&O) policies from commercial insurers on terms it deemed financially acceptable. As a result, as detailed in its Q2 10Q, it reached an agreement with Saylor in which the founder and CEO indemnified the board members and C-suite for damages incurred in suits by shareholders. Private carriers are now providing D&O protection for up to $30 million in damages. But Saylor is personally indemnifying the directors and officers for another $10 million over and above claims paid by the carriers. He’s also providing D&O coverage for up to $40 million in claims for policies instituted before the new commercial policies were secured in June. The company is paying Saylor “premiums” of $1.2 million on an annualized basis to provide the coverage.

Put simply, Saylor is insuring himself, his board, and his executives against shareholder suits because the carriers who usually provide comprehensive coverage consider it too risky.

There are no shortage of critics predicting Saylor’s experiment will end in grief. David Trainer, an accounting expert and founder of research firm New Constructs quips that “in terms of madmen, Saylor is ‘Elon Junior,’ without the business talent.” Adds Trainer, “He’s massively misallocating his investors’ capital because the market rewarded that behavior in the short-term. It will reconcile in a painful way for himself and his shareholders.”

Saylor’s origin story: From the top of his high school class to founding MicroStrategy at age 24

From his early days, Saylor has been an unusual blend of a deep intellectual and a carnival barker. His father was a U.S. Air Force master sergeant, his mother the daughter of a country singer. As a teenager growing up near the Wright-Patterson base in Dayton, Ohio, Saylor learned to fly gliders and finished first in his high school class. He went to MIT on an ROTC scholarship, studying the history of technology, aeronautics, and astronautics. His thesis presented a mathematical model for an Italian Renaissance city-state. A benign heart murmur grounded his ambitions to become a pilot or astronaut, and after a brief spell as a computer simulation planner at DuPont, Saylor at age 24 cofounded MicroStrategy in 1989 as a consulting firm with two friends from MIT.

The group recognized the internet’s power for the parsing troves of data that companies collected on their products and markets. Soon clients were paying MicroStrategy hundreds of thousands a year to create easy-to-read charts and grids showing key trends in the types of consumers who preferred different soft drinks or insurance products. Winning a $10 million contract from McDonald’s to develop applications for analyzing the effectiveness of its promotions furnished an early boost.

By the time the 11-day 1998 IPO road show rolled around, Saylor had hit his stride, inviting a Washington Post reporter along to chronicle the process. Saylor’s selling style relied on passion, stagecraft, and a lofty vision, not numbers. His rah-rah intro to the official presentation got more buzz than the slideshow: “We’re so focused, we’ll burn a hole in the ceiling!” he’d proclaim.

The I-fill-a-room approach worked big-time. The Wall Street crowd viewed Saylor as arrogant but persuasive. According to the rollicking account, Saylor showed so much passion, and presented such a compelling road map for the future of data analytics, that bankers signed on virtually as a leap of faith. An ultra-arrogant software investor started the meeting by raging about how much he despised most of the industry’s CEOs. But somehow Saylor’s grand vision, his argument that his products would “purge ignorance from the planet,” got the investor to sign on. At Bear Stearns, it took Saylor just 20 minutes before his host scribbled “10%” on the prospectus, signaling his firm would take that chunk of the offering, and walked out. So impressed were the notoriously tough gatekeepers from Fidelity, the world’s largest fund purveyor, that winning their commitment, in Saylor’s words, amounted to “a slam dunk.”

Following the IPO in June 1998, MicroStrategy dazzled Wall Street to shine as a darling of the dotcom frenzy. By March of 2000, its shares had soared 16-fold from the offering price, ballooning its market cap to almost $18 billion.

The company was a pioneer in an important new field: enterprise analytics, software programs that enable retailers, pharma giants, banks, insurers, and government agencies to spot key trends by parsing vast streams of data. It would eventually boast a roster of over 300 mainly longstanding clients, including KFC, Pfizer, Disney, Allianz, Lowe’s, and ABC. Using MicroStrategy’s technology, a coffee chain can dive deep into loyalty card data to identify which flavors different types of customers prefer, so they can target the best candidates for a new offering by sending special offers to their mobile devices. Retailers deploy MicroStrategy’s analytics to find the responses reps use at contact centers that best help customers and shorten calls. Insurers summon its programs to spot and nudge patients suffering from chronic conditions who aren’t taking their medication on schedule.

To be sure, MicroStrategy never achieved tech superstardom. For two decades, Saylor ran his brainchild in a workmanlike fashion, more or less from the shadows. MicroStrategy bumped along as a reliable plodder. Its two main rivals in the field, Salesforce.com and Microsoft’s Intelligent Cloud business, home of its Azure product, started later but grew fast, while MicroStrategy flatlined at annual sales in the $500 million range. Still, it remained a durable survivor.

But on Mar. 20, 2000, MicroStrategy rocked the markets by announcing that its auditors, PriceWaterhouseCoopers, required their client to radically restate revenues and profits for the previous two years. The restatements for 1998 and 1999 took MicroStrategy from a previously reported $28 million gain from operations to a $37 million loss. Saylor, a cofounder, and the former CFO paid the SEC $11 million to settle the charges, the CEO surrendering $8.3 million. Neither Saylor nor the others implicated in the scandal admitted wrongdoing.

By mid-2002, MicroStrategy’s valuation had dropped to around $40 million, down some 98% from its peak.

But Saylor had an idea—one that would lead to an astounding comeback. Anticipating the explosion in mobile devices, he foresaw a niche in providing the programs that enable clients to analyze the vast troves of customer data collected over iPhones or laptops. Around 2009, Saylor offered his software to Facebook’s new COO, Sheryl Sandberg—for free. MicroStrategy became central to the social network’s infrastructure, providing such functions as informing salespeople how much revenue each produces, according to a 2012 Fortune story by David Caplan. Facebook eventually proved a multimillion-dollar-a-year customer, and Saylor rode the mobile wave to achieve a trajectory of moderate but consistent profitability.

But if the business was less than flashy, Saylor’s personal life was anything but. Among his holdings: Villa Vecchia in Miami Beach, an opulent mansion built for the president of F.W. Woolworth that has 13 bedrooms and 12 baths. He also has a $47 million Bombardier jet and two yachts. The 147-foot Harle, reportedly named after the ship that brought his ancestors from Rotterdam in the Netherlands to Philadelphia in 1736, features artwork databases that display digital versions of Monets, Van Goghs, and Picassos, not to mention a giant hot tub on the top deck. His backup party vessel, the similarly sized Usher, welcomes guests to art deco and Polynesian-themed staterooms, and offers two on-board margarita machines. According to the 2012 Fortune piece, the never-married Saylor was rumored to have dated Queen Noor of Jordan, and had his own private butler.

His host-with-the-most parties are legendary. At his birthday celebration at Washington’s W Hotel in 2010, Saylor organized a safari-themed affair festooned with exotic animals—draping an albino Burmese python around his own neck for photos. Each year just before Thanksgiving, Saylor holds his renowned Rocktoberfest gala in Manhattan’s SoHo and assorted venues, where the guests dress as rock stars.

Looking for his big idea

Flamboyant social life aside, what Saylor really craves is widespread influence in the tech world, former associates interviewed by Fortune say. According to those sources, Saylor yearns to be a renowned thought leader—“to be widely admired as an intellectual powerhouse,” in the words of one departed employee.

Indeed, he’s been prescient at spotting trends: His 2012 book—briefly a bestseller—The Mobile Wave: How Mobile Intelligence Will Change Everything foresaw the revolution that mobile devices would unleash on everything from retailing to banking.

Saylor created at least two remarkable new businesses inside MicroStrategy. “He’s got the ability to see the future,” says a former associate. In the late aughts, he developed a pioneering platform that enabled homes and businesses to monitor security systems over the web called alarm.com. He sold it to private equity investors in 2008 for $28 million. Today, Alarm.com is a thriving publicly traded enterprise valued at $3.5 billion. In the early 2010s, Saylor developed one of the first automated voice response systems for contact centers, a cloud-based service called Angel. Genesys bought Angel in 2013 for $110 million. According to a study by Prescient & Strategic Intelligence, the contact center software market is now a $24 billion business forecast to grow at 18% over the next decade—and the Angel deal helped make Genesys a major player in the field.

He’s good at incubating talent as well as businesses. “He leaves a mark on anyone who works with him,” says a departed manager. By all accounts, Saylor inspires people with a kind of mad-genius daring that makes them believe that if he can make these crazy experiments work, they can too. Among his successful alums are Joe Payne, who in 2013 sold software startup Eloqua to Oracle for almost $1 billion; and his cofounder, Sanju Bansal, who together with CEO Reggie Aggarwal launched Cvent, which provides software for planners of in-person and mobile conferences and other events. It IPO’d last December, and now carries a market cap of $2.8 billion.

Still, former associates say that Saylor is a highly temperamental micromanager who, as one source puts it, “controls too tightly.” Saylor’s supreme self-confidence made him believe that he could run everything himself, and made him reluctant to delegate strong operating roles to lieutenants, according to ex-employees.

“He doesn’t allow people to do things their own way, and over time,” the source continues. “And that freedom [is what] creates more growth over time. Still, there’s more good here than bad. Imagine if you’d invested in his theses over time, in the web, mobile technology, the cloud!”

Saylor’s emotional, mercurial style ignites heavy churn in the C-suite, hindering MicroStrategy’s growth. Since 2018, he’s had three chief marketing officers, and a CFO left in 2020 after just one year. His problem keeping good people may also explain why he didn’t fully build such promising ideas as Angel and Alarm.com but instead sold the technology.

Enabling Saylor’s controlling tendencies is MicroStrategy’s shareholder structure, which awards him power far in excess of his ownership position. The company has two classes of stock, and Saylor’s ownership of B shares that carry 10 votes versus one for the class A give him 64% of the votes, though he owns just one-fifth of the total shares. In effect, Saylor can do whatever he wants at MicroStrategy. The danger is that by putting its assets in harm’s way, and undermining its formerly profitable core business, he destroys immense value for his shareholders. Saylor has already taken extraordinary, possibly quixotic liberties with a business that’s 80% owned by public shareholders.

Bitcoin’s biggest booster

At the same time he wildly shifted MicroStrategy’s fortunes into Bitcoin, Saylor emerged as arguably the world’s leading promoter for the cryptocurrency. According to press reports, it was Saylor who helped convince Elon Musk to buy $1.5 billion in Bitcoin early last year, an endorsement that greatly boosted its price and reputation. (Tesla sold most of its Bitcoin holdings in Q2, and retains just one-quarter of its original purchases.)

Bitcoin’s steep drop from almost $70,000 in late 2021 to under $20,000 in June 2022 rallied Saylor to appear almost daily on TV arguing that Bitcoin is the future of finance, and that the selloff makes it an even more fantastic buy. On CNBC, CNN, Fox’s Tucker Carlson Tonight or CoinDesk’s webcast, Saylor typically appears clad in an open-collared black shirt, sporting a shaggy mop of gray hair, seated before a fireplace at his penthouse apartment on the Georgetown waterfront in Washington, D.C. He seldom specifies practical uses for Bitcoin, such as its potential as a currency for buying and selling cars and groceries, or as a hedge against inflation. Instead, in his trademark high-pitched delivery, Saylor argues that the world is on the verge of an economic cataclysm, and that Bitcoin represents a haven of stability. “Bitcoin is a lifeboat, tossed on a stormy sea, offering hope to anyone that needs to get off the sinking ship,” he intoned on CNN. Saylor’s Twitter feed features his image emitting smoke through flashing “l(fā)aser eyes” that “signal intent to make Bitcoin an instrument of economic empowerment.” (“He thinks he’s Zeus,” snaps one critic.)

Saylor argues that Bitcoin will reach $500,000 within a few years, and that folks should “take the money they were going to give their grandchildren and convert it to Bitcoin.”

The crazy thing is, despite the Bitcoin crash, amazingly, MicroStrategy is worth far more now than when Saylor started his adventure: Since August 2020, despite huge spikes and deep drops along the way, MicroStrategy’s stock has almost tripled to $323 as of August 3. Crypto-loving traders clearly see MicroStrategy as a proxy for Bitcoin.

The problem? MicroStrategy’s performance is defying its weak fundamentals. Its stock consistently posts increases that far outstrip the dollar gains for the Bitcoin holdings: On June 16, with Bitcoin selling at around $20,300, MicroStrategy’s shares traded at $161, and its market cap stood at $1.8 billion. By August 3, Bitcoin had rebounded by 15% to $23,300, raising the value of MicroStrategy’s strongbox by around $400 million. But even though its basic business was fading, its shares over those six weeks almost doubled to $312. That moonshot added $1.8 billion to its market cap, more than four times the amount the Bitcoin on its books swelled in value.

This phenomenon suggests a “Saylor premium”: that the CEO’s charismatic salesmanship is converting hordes of believer-shareholders to his vision. Of the six analysts providing 12-month price forecasts for MicroStrategy, two are pessimistic, predicting a drop to between $180 and $250; two reckon the stock have maxed out that the current $300-plus; and two see room for big increases, with BTIG Research expecting a jump to $950. The view that the leap in the stock price is far out of proportion to its gains on Bitcoin has prompted short-sellers to pour into MicroStrategy. Around half of its shares are currently sold short, a record for this longstanding target for shorts.

According to critics, Saylor’s big switch is hurting its bedrock software franchise, and he needs big cash flows from that business to support the new billions in debt. “I can’t imagine that the uncertainty of holding all that Bitcoin can be good for the underlying business,” says Ryan Ballentine of Bireme Capital, who’s shorting MicroStrategy shares. “If you’re a client and worry it could cause big problems, why not go to a competitor like Microsoft?”

Saylor has also leveraged MicroStrategy so heavily that if the price of Bitcoin drops, it will lack the cash to repay big chunks of debt that could come due as early as 2025.

Since Saylor started buying Bitcoin in August 2020, he’s borrowed a staggering $2.4 billion to purchase coins, using three separate bond offerings and a margin loan. He’s also tapped most of the company’s pre-Bitcoin cash, and all of its free cash flow, to buy more.

In addition, he floated a $1 billion equity offering in February of 2021, and plowed all the proceeds into Bitcoin. At the time, MicroStrategy shares had jumped from $124 in August of 2020 to $770. “On the financing side, Saylor was smart to sell his shares at such an overpriced number,” says short-seller Ballentine of Bireme Capital. “He would have been a lot better off buying all of his Bitcoin with overpriced stock. Instead, he’s stuck with loads of debt that bought super-volatile Bitcoin that could become worth a lot less than the debt.”

The rub is that Saylor has spent $4 billion to accumulate 129,699 Bitcoin at an average price of around $31,320. But today, with Bitcoin selling at roughly $23,300 or 26% less, his holdings are worth $3 billion, or $1 billion less than he paid. Before the Bitcoin adventure, MicroStrategy held virtually no debt and hence carried no interest expense. But today, it owes $2.4 billion to bondholders and hedge funds. It’s also paying $46 million a year in interest on those borrowings.

Hence, MicroStrategy faces four big threats. First, its interest costs wipe out the free cash flow from the software business, after subtracting the cost of options grants. MicroStrategy has no margin for error if profits from the basic business shrink. And that’s a strong possibility. As short-seller Ballentine points out, clients know that if MicroStrategy loses any substantial amount of business, it won’t be able to cover its interest payments without selling Bitcoin, something Saylor swears will never happen.

Second, the tight conditions of MicroStategy’s financings also raise red flags. It’s borrowing on terms of under three to six years for financing what it bills as an ultra-long-term investment. It issued $500 million on senior secured notes officially due in 2028, and also floated a $650 million convertible bond offering payable in 2025. But the covenants on the 2028 senior notes stipulate that if the company doesn’t have the full $650 million in cash available to pay off the 2025 offering when it comes due, the maturity on the $500 bond jumps to 2025, and is payable ahead of the $650 million bond. So as early as 2025, if MicroStrategy doesn’t have the $650 million in cash, it will need to pay the $500 million and, after satisfying that debt, retire the original 2025 issue for $650 million in cash. To make both payments, MicroStrategy would need $1.05 billion in liquidity.

Keep in mind that right now, its Bitcoin strongbox is worth just $700 million or so more than its debt. And MicroStrategy holds little extra cash. It’s famously spending everything on Bitcoin. Nor is the software business generating any significant cash, due to the big jump in interest expense. It’s unlikely that the price of Bitcoin will drop so low that MicroStrategy won’t be able to repay the debt as the bonds and margin loan come due through 2025. But if the price settles at below $20,000, by that point it could owe more than the value of the coins on its books. The company risks being effectively insolvent. And that’s assuming the software business generates the cash to cover its current interest so that Saylor doesn’t have to start dumping coins to keep the payments current.

Third, what happens if MicroStrategy just bumps along much as it’s doing now? Bitcoin’s price stays in the low to mid-$20,000s, and it produces enough cash to pay its interest. The most likely outcome is that the shares revert to their fundamental value. “If MicroStrategy muddles along, the crypto-insanity premium goes away,” says Ballentine. “The core business is making no money after interest payments.” What’s left is the difference between the Bitcoin holdings, and the debt incurred to build the stockpile. Right now, that number is around $700 million. And that’s the underlying worth Ballentine is placing on all of MicroStrategy. If he’s right, the company right now, at a market cap of $3.6 billion, is overpriced by around 80%. In the muddling scenario, the math takes precedence, Saylor’s Pied Piper appeal evaporates, and MicroStrategy’s stock takes a deep dive.

Which brings us back to the final risk factor. If the stock dives below its traditional value as a sound software franchise, MicroStrategy is likely to see a rash of suits against its leaders for breach of fiduciary duty, and as previously stated, it’s Saylor himself who is providing a big part of the coverage at this point. The suing shareholders could have a strong case. Saylor has loaded his creation with gigantic debt to amass the most volatile and controversial of assets, while endangering a stalwart that could have kept minting modest profits for years to come.

In the end, Michael Saylor is famous for his outrageously self-confident predictions about the technological future. Despite the violent ups and downs, he’s been right some of the time. But by hitching himself to Bitcoin, he’s staked his company’s future on a wildly volatile speculative vehicle.

It’s impossible to tell whether this elevator is heading for the penthouse or the sub-basement.