According to The Block, MicroStrategy will officially join the tech-focused Nasdaq-100 index, mainly benefiting from its nearly 500% price increase year-to-date.
As the largest corporate holder of Bitcoin, MSTR will join the index on December 23 alongside data company Palantir and stun gun manufacturer Axon Enterprise, replacing biotech firms Moderna, Illumina, and server manufacturer Super Micro Computer.
According to analysts, several large ETFs will purchase the stock, including the popular QQQ ETF, which is expected to lead to over $2 billion in buying.
MicroStrategy (MSTR) is an enterprise software company that has gradually become a stock market proxy for Bitcoin. Its founder, Michael Saylor, has accumulated a large amount of Bitcoin using the 'flywheel effect,' making MicroStrategy the largest corporate holder of Bitcoin.
MSTR will join the tech-heavy Nasdaq 100 index on December 23, alongside data company Palantir and stun gun manufacturer Axon Enterprise. This means the company will also be subject to purchases by several large exchange-traded funds (ETFs), including the heavily traded QQQ ETF. Bloomberg ETF analyst James Seyffart predicts that the ETFs will purchase at least $2.1 billion worth of MSTR stock when it is added to the index.
Currently, MSTR's market capitalization is approximately $98 billion, significantly higher than the spot value of its 423,650 Bitcoins, which is slightly below $4.3 billion at current prices. Since September 12, the company has purchased 197,150 Bitcoins, significantly increasing its holdings while raising its cost basis.
After being included in the Nasdaq 100 index, Bernstein analysts stated that the company may aim for inclusion in the S&P 500 index by 2025. However, considering the lack of profitability in its enterprise software business, joining the index may be more challenging, as Executive Chairman Saylor's Bitcoin strategy has become the core activity of the company.
The inclusion of MSTR stock in the Nasdaq index is due to the annual rebalancing of the index, which is primarily based on the company's market capitalization on the last trading day of November, but other factors are also considered.
