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MicroStrategy joins Nasdaq-100 Index following Bitcoin surge

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MicroStrategy, the largest corporate holder of Bitcoin, will officially join the Nasdaq-100 index effective Dec. 23.

The company’s inclusion follows an eventful year that saw its stock value increase more than sixfold.

The Nasdaq-100 index is up 29.4% in 2024.

What does it mean?

Joining the Nasdaq-100 index ranks MicroStrategy, the software company turned Bitcoin (BTC) treasury, among some of the biggest corporations, including Apple Inc., with a market cap exceeding $3 trillion; Microsoft Corporation, valued at over $2 trillion; NVIDIA Corporation, boasting a market cap surpassing $1 trillion; Amazon.com Inc., with its market cap of around $1.5 trillion; and Alphabet Inc., which has a market cap nearing $1.8 trillion.

Other newcomers to the index this year include Palantir Technologies and Axon Enterprise.

This inclusion typically leads to increased stock purchases as exchange-traded funds, or ETFs, tracking the index adjust their holdings to reflect the changes.

To be included in the Nasdaq-100, a company must meet specific criteria and maintain a position of prominence in the stock market. For MicroStrategy, it’s among the 100 largest non-financial companies listed on the Nasdaq stock exchange based on market capitalization.

Inclusion also signifies that the company is among the most valuable and must maintain its stock performance to stay included. Poor performance or a drop in market cap can lead to exclusion, as was the case this year with Illumina, Super Micro Computer, and Moderna.

MicroStrategy’s transformation

The firm began acquiring Bitcoin in 2020 as a treasury reserve asset amid declining software business revenue. The strategy has proven remarkably successful, with the company’s market capitalization now approaching $97.94 billion.

The firm recently expanded its Bitcoin holdings further, with Executive Chairman Michael Saylor announcing the acquisition of 21,550 Bitcoin for approximately $2.1 billion between December 2 and December 8, bringing their total holdings to 423,650 BTC.

Bernstein analysts view the Nasdaq-100 inclusion as a stepping stone toward potential S&P 500 inclusion in 2025, suggesting further upside for the company’s stock.

The analysts anticipate improved visibility and recognition beyond fresh ETF inflows as a result of the index inclusion.MicroStrategy’s stock performance has closely tracked Bitcoin’s price movements, benefiting from the cryptocurrency’s recent surge past $100,000.

This rally has been partially attributed to optimism surrounding President-elect Donald Trump’s victory and expectations of more favorable regulatory conditions for the crypto sector.

The company’s success has redefined corporate treasury management strategies, showcasing the potential benefits of Bitcoin as a reserve asset. MicroStrategy’s approach has lured attention from institutional investors and corporate treasurers.

This development represents a major milestone in the mainstream acceptance of Bitcoin-focused business strategies, as MicroStrategy becomes one of the few companies with substantial cryptocurrency exposure to join a major stock index.

The inclusion in the Nasdaq-100 validates the company’s Bitcoin-centric approach and could encourage other corporations to consider similar strategies for treasury management.



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Bitcoin

MSTR Could Be Eligible for S&P 500 Inclusion in June if BTC Closes Q1 Above $96K

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Disclaimer: The analyst who wrote this piece owns shares of Strategy (MSTR)

Strategy (MSTR) could be on track for potential S&P 500 inclusion by June 20.

Currently, the company meets all eligibility requirements except one: achieving positive GAAP net income over the trailing 12 months (the most recent four quarters combined). To qualify, Q1 2025 earnings must be high enough to offset losses from the previous three quarters—a goal that could be achieved thanks to the adoption (now mandatory) of the Financial Accounting Standards Board (FASB) digital asset accounting rule.

The FASB rule change requires companies to recognize bitcoin (BTC) holdings at fair value, meaning price gains will flow through to the bottom line (as would price declines). Prior to this rule, corporate digital asset holders were required to account for holdings at their weakest levels. Strategy, for example, in the fourth quarter of 2024 still valued its bitcoin at less than $16,000 per token, leading to a $1 billion impairment loss even as bitcoin closed the year at about $94,000.

Holy Grail

According to an analysis by Richard Hass on X, assuming Strategy holdings don’t change between now and March 31, bitcoin must close the first quarter above $96,337 for the company to meet the positive trailing 12-month earnings requirement. “Based on Q4 2024 earnings of -$671 million in net income MSTR requires $1.113B in Q1 2025 earnings to produce positive earnings in the prior four quarters and become eligible for S&P 500,” he wrote. “Based on MSTR’s current treasury of 478,740 BTC, the required BTC price on March 31 to achieve this is $96,337”. 

If bitcoin prices remain strong and MSTR continues accumulating tokens, S&P 500 inclusion is within reach. Said Benchmark analyst Mark Palmer:

“MSTR’s adoption of the amended FASB guidance strengthens its case for S&P 500 inclusion. Given its outperformance of every current index constituent over four years, exclusion would be surprising.”

“While joining the Nasdaq-100 was significant, the S&P 500 is the holy grail,” continued Palmer.” Inclusion would validate its Bitcoin strategy, as all S&P 500 index funds would hold MSTR shares, indirectly exposing investors to Bitcoin.”

Disclaimer: Richard Hass’s original X post was made before Strategy’s latest bitcoin purchase. CoinDesk reached out for updated analysis, including Monday’s acquisition.





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MSTR Reports Q4 Loss; BTC Holdings Remain At 471,107

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Strategy (MSTR) reported a fourth-quarter net loss of $3.03 per share, compared to income of $0.50 per share a year earlier.

The loss incurred as the company took an impairment charge on its 471,107 token bitcoin (BTC) holdings.

It’s been an extremely eventful week for Strategy prior to the earnings, including an upsizing in the company’s preferred stock offering and a name change just hours ago.

The firm recently ended a long string of bitcoin purchases and currently holds 471,107 tokens worth roughly $45 billion.

The Financial Stability Accounting Board (FASB) last year implemented a new fair value accounting rule for corporates holding digital assets. Use of the rule was voluntary through the end of 2024, but will be required beginning in the first quarter of this year.





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Crypto Stocks Fall 5% as U.S. Futures Point to More Bitcoin Losses

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Shaurya Malwa

Shaurya is the Co-Leader of the CoinDesk tokens and data team in Asia with a focus on crypto derivatives, DeFi, market microstructure, and protocol analysis.

Shaurya holds over $1,000 in BTC, ETH, SOL, AVAX, SUSHI, CRV, NEAR, YFI, YFII, SHIB, DOGE, USDT, USDC, BNB, MANA, MLN, LINK, XMR, ALGO, VET, CAKE, AAVE, COMP, ROOK, TRX, SNX, RUNE, FTM, ZIL, KSM, ENJ, CKB, JOE, GHST, PERP, BTRFLY, OHM,
BANANA, ROME, BURGER, SPIRIT, and ORCA.

He provides over $1,000 to liquidity pools on Compound, Curve, SushiSwap, PancakeSwap, BurgerSwap, Orca, AnySwap, SpiritSwap, Rook Protocol, Yearn Finance, Synthetix, Harvest, Redacted Cartel, OlympusDAO, Rome, Trader Joe, and SUN.





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