Canaccord's Joseph Vafi on what's next for bitcoin proxy Microstrategy

MicroStrategy's Bitcoin Strategy - MicroStrategy initiated its Bitcoin acquisition strategy in August 2020 and has since become the best-performing stock in the Fortune 500, outperforming Bitcoin by double or more [2] - The company leverages its operating company balance sheet to opportunistically acquire Bitcoin through equity and debt [1] - MicroStrategy acquired another $4 billion of Bitcoin this month using equity and priced a convertible notes offering to raise another $2.5 billion, expected to be used for further Bitcoin acquisitions [5] Premium Analysis - The premium, defined as the value of the stock relative to the amount of Bitcoin held on the balance sheet, is over 200% [4] - The premium can be viewed as both a risk and an opportunity, as the company can exploit it to continue buying Bitcoin and expand Bitcoin per share [5] - The software business now accounts for less than 10% of the overall enterprise value, with the Bitcoin strategy dominating [7] - Even after backing out the operating business valuation, the premium remains significant, highlighting the dominance of Bitcoin in the company's valuation [7][8] Comparison with Bitcoin ETF - MicroStrategy possesses an operating company balance sheet, enabling it to leverage capital markets to accretively buy Bitcoin, unlike a Bitcoin ETF [8]