MicroStrategy Stock Gets First Inclusion in Nasdaq 100
Bitcoin investment firm MicroStrategy has been included in the Nasdaq 100 after a year in which its MSTR stock price exploded, reaching a market capitalization of nearly $98 billion.
The Nasdaq Stock Exchange on December 13 (US time) decided to add MSTR shares of MicroStrategy - a software company famous for its Bitcoin buying strategy and currently holding $43.4 billion in BTC - to the Nasdaq 100 list.
IN: MicroStrategy, Palantir, Axon
OUT: Moderna, Illumina, Super Micro Computer
— Eric Balchunas (@EricBalchunas) December 14, 2024
The Nasdaq 100 is a stock index of 100 stocks of companies in the non-financial sector including industrials, technology, retail, telecommunications, biotechnology, healthcare, transportation, media and services. The index currently aggregates the stock prices of the world's leading corporations such as Apple, Amazon, Google, Microsoft, Tesla, NVIDIA, Meta, Costco, etc.
On November 29, when Nasdaq compiled market capitalization data to prepare for the annual adjustment of the list of stocks appearing in the Nasdaq 100, MicroStrategy had a capitalization of $92 billion, ranking 40th among the companies in the index.
However, at the time of writing, MSTR's capitalization is nearly $98 billion, with its stock price having increased by nearly 550% this year and breaking the ATH peak that existed since 2020, thanks to the explosion of the cryptocurrency market in recent months.
MSTR is likely to have a 0.47% weight in the Nasdaq 100, according to Bloomberg analyst Eric Balchunas. By comparison, the index's largest stock, Apple, has a weight of approximately 8.75%.
Being added to the Nasdaq 100 would give MSTR exposure to passive investment flows from large U.S. institutions. Balchunas pointed out that ETFs derived from the Nasdaq 100 have a total asset value of up to $550 billion.
$MSTR is likely to be added to $QQQ on 12/23 (w/ announcement coming 12/13). Moderna likely to get boot (symbolic). Below is best guess of adds/drops via @JSeyff. Likely a 0.47% weight (40th biggest holding). There's $550b of ETFs tracking the index. S&P 500 add next yr prob. pic.twitter.com/rmTavtvWQL
— Eric Balchunas (@EricBalchunas) December 10, 2024
However, analyst James Seyffart said that MSTR's ability to stay in the Nasdaq 100 is not certain because the company could be reclassified as a "financial" group in March, since the majority of its assets come from Bitcoin investments rather than traditional business activities. MicroStrategy founder Michael Saylor has also affirmed in the past that he wants to turn his company into the first "Bitcoin bank", emphasizing finance over technology.
My thoughts on MicroStrategy getting reclassified as a financials stock on the back of our prediction that Nasdaq will likely announce its entry into the Nasdaq 100
(The rules indicate $MSTR *should* be added in our view but its not official until Nasdaq announces it on Friday) pic.twitter.com/NCj96owSw5
— James Seyffart (@JSeyff) December 11, 2024
As reported, MicroStrategy has been on a Bitcoin accumulation spree since 2020, with a total purchase value of $43.4 billion as of December 13. The company is currently making a profit of nearly 70% on this investment, equivalent to $17.8 billion.
In the past two months alone, Michael Saylor's company has spent $14.6 billion to accelerate the pace of BTC purchases, helping the currency break the $100,000 mark and set a new record high.
MicroStrategy announced a new plan in late October, aiming to raise an additional $42 billion over the next three years to further increase its Bitcoin holdings. The company's usual fundraising method is to issue bonds with the option to convert directly into MSTR shares at a discount. This strategy has been called "infinite money printing" by financial analysts, helping the company easily attract a huge amount of capital in a short period of time to buy Bitcoin, thereby increasing the company's value without worrying about affecting the MSTR stock price.d only May 2021.
