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MicroStrategy’s Stock Surges as Nasdaq-100 Inclusion Announced
Shares of MicroStrategy experienced a notable increase on Monday, following the announcement from Nasdaq that the company will be included in the Nasdaq-100 index. This decision is set to take effect on December 23, coinciding with the annual rebalancing of the index.
In premarket trading, MicroStrategy’s stock saw a rise of over 5%, reflecting investor optimism. The Nasdaq-100 index comprises 100 of the largest non-financial companies listed on the Nasdaq stock market, with membership primarily determined by market capitalization on the final trading day of November, alongside liquidity requirements and a minimum number of free-floating shares.
This inclusion is especially significant given MicroStrategy’s impressive performance over the past year. The company’s stock price has soared by 547% in 2024, significantly outpacing the S&P 500 index, which has risen by 26.9% during the same period. This surge in MicroStrategy’s stock value is closely tied to the remarkable rise in Bitcoin prices, with Bitcoin trading at approximately $104,650, reflecting a daily increase of over 1%.
Building Bitcoin Reserves
MicroStrategy has positioned itself as a key player in the cryptocurrency space by accumulating substantial Bitcoin reserves, owning more than 420,000 bitcoins. This investment strategy has effectively made MicroStrategy a proxy for Bitcoin investment, attracting the attention of investors and analysts alike.
Impact on Invesco QQQ Trust ETF
The company’s addition to the Nasdaq-100 also means it will be part of the Invesco QQQ Trust ETF, which tracks the performance of the index. This could result in increased passive investment inflows into MicroStrategy’s stock, providing further support for its price trajectory.
Analysts Weigh In
Bernstein analyst Gautam Chhugani highlighted the uniqueness of MicroStrategy’s approach to Bitcoin accumulation, calling it “unprecedented on the street,” and noting that it makes MicroStrategy the largest corporate holder of Bitcoin, equivalent to about 2% of the total supply with a market value of approximately $44 billion. Chhugani commented that inclusion in the Nasdaq-100 would enhance MicroStrategy’s market liquidity and bolster its capital dynamics and Bitcoin purchasing endeavors.
Source
www.cnbc.com