Micheal Saylor the chairman of MicroStrategy never disappoints their investors with his decision. Today on July 11, 2024, Saylor made a post on X that has gained massive attention from investors and traders. According to the post on X, MicroStrategy, a leading software firm listed on Nasdaq and recognized as the largest corporate holder of Bitcoin, has announced a 10-for-1 stock split.
$MSTR announces 10-for-1 Stock Split https://t.co/u7sIjWc9we
— Michael Saylor (@saylor) July 11, 2024
MSTR to split 10:1
This means that for every share currently owned, shareholders will receive nine additional shares. The split is scheduled to take effect on August 1, with the distribution of new shares occurring after the market closes on August 7.
The primary goal behind MicroStrategy’s decision is to enhance accessibility to its shares for both investors and employees. Over the past year, MicroStrategy’s stock price has surged significantly, more than tripling to peak at over $1,900 in March. This rise has been closely tied to the increasing value of Bitcoin, which reached heights above $70,000 during the same period.
Michael Saylor, a prominent advocate for Bitcoin adoption, is often viewed as a company whose fortunes are heavily influenced by the cryptocurrency market. The firm regularly raises capital by issuing corporate debt to purchase additional bitcoins for its treasury. Currently, MicroStrategy holds approximately 226,331 Bitcoins, valued at more than $13 billion, following its recent acquisitions.
Stock splits are a common strategy employed by companies whose share prices have experienced substantial appreciation. While a stock split does not alter the overall value of the company, it typically results in a lower share price, potentially making the stock more appealing to smaller investors. This move comes at a time when many trading platforms enable investors to purchase fractional shares, further increasing accessibility.
Bitcoin price-performance analysis
Following this announcement, Bitcoin price jumped 1.5% and currently trading near $58,530. Despite the price jump, the trading volume in the last 24 hours has dropped by 6%, signaling lower investors’ and traders’ participation in the choppy market.
In a similar recent move, Nvidia, a prominent chipmaker, also implemented a 10-for-1 stock split after witnessing a significant surge in its share price driven by advancements in artificial intelligence technologies.
MicroStrategy’s announcement reflects its strategy to democratize ownership of its shares amidst a period of robust growth and increasing interest in cryptocurrencies, particularly bitcoin.