SummaryMSTR owns 130k Bitcoins.Using sum of the parts valuation, MSTR shares are overvalued by over 60%.In my opinion, Bitcoin is unlikely to rally sustainably until risk appetites improve.Analyzing MicroStrategy Incorporated (MSTR) using a sum of parts valuation, I think the company is overvalued by over 60%. Even if one is bullish on Bitcoin (BTC-USD), there are a multitude of ways to gain exposure without having to pay the exorbitant premium to NAV on MSTR shares. Bitcoin is unlikely to rally sustainably until macro risk appetites improve. Investors can monitor this by looking at the ratio of Invesco S&P 500 High Beta ETF (SPHB) to the Invesco S&P 500 Low Volatility ETF (SPLV) ETF.Brief Company OverviewMicroStrategy Incorporated, led by its mercurial Chairman Michael Saylor (formerly the CEO), is a business intelligence software company that also happens to own ~130k Bitcoins.MSTR, once a sleepy small-cap survivor of the dot-com bust, famously adopted its Bitcoin strategy shortly after the COVID pandemic. First, it spent a portion of its cash reserves to acquire ~21k Bitcoins in August 2020 at ~$11,600 / Bitcoin. After exhausting its cash reserves, MSTR went even further, issuing more than $2 billion in debt to acquire even more Bitcoins (Figure 1).Figure 1 - MSTR Balance Sheet (tikr.com)Ultimately, the company has acquired approximately 130k Bitcoins for $4 billion in consideration, financed through multiple debt i...
