Shares of MicroStrategy Inc. surged on Monday after the Nasdaq announced the company’s inclusion in the tech-heavy Nasdaq-100 index, effective December 23. This decision reflects MicroStrategy’s strong performance, underpinned by its aggressive investment in Bitcoin, making it a standout stock in 2024.
The announcement caused the stock to jump over 5% in premarket trading, signaling investor confidence in the company’s trajectory.
Annual Nasdaq-100 Rebalance
The Nasdaq-100 index undergoes an annual rebalancing based on market capitalization rankings as of the final trading day in November. Eligible companies must meet strict liquidity and free-float requirements. MicroStrategy’s inclusion is a testament to its impressive growth and market presence.
MicroStrategy’s Remarkable 2024 Performance
In 2024, MicroStrategy’s stock skyrocketed by 547%, significantly outperforming the broader market. For context, the S&P 500 index advanced by 26.9% during the same period. This surge aligns with Bitcoin’s rally to record highs, with the cryptocurrency last trading at approximately $103,806.69.
MicroStrategy is renowned for its robust Bitcoin acquisition strategy. The company currently holds more than 420,000 Bitcoins, equivalent to 2% of the cryptocurrency’s total supply, valued at over $44 billion. This makes it the largest corporate Bitcoin holder globally, solidifying its status as a proxy for digital currency investments.
Inclusion in Invesco QQQ Trust ETF
Joining the Nasdaq-100 also means MicroStrategy will now be part of the Invesco QQQ Trust ETF, which tracks the index. This inclusion is expected to generate passive investment inflows, potentially driving further growth in the stock’s value.
Analysts view this move as a significant milestone for the company. Bernstein analyst Gautam Chhugani highlighted that this development enhances the stock’s liquidity and supports the company’s innovative Bitcoin-buying strategy.
FAQs About MicroStrategy’s Nasdaq-100 Inclusion
Why was MicroStrategy included in the Nasdaq-100 index?
MicroStrategy was included due to its strong market capitalization growth, robust liquidity, and compliance with Nasdaq’s free-floating share requirements.
What impact will this have on MicroStrategy’s stock?
Inclusion in the Nasdaq-100 and Invesco QQQ Trust ETF is likely to attract passive inflows, boosting the stock’s liquidity and valuation.
How has MicroStrategy performed in 2024?
The company’s stock is up by an extraordinary 547% this year, fueled by Bitcoin’s rally and its reputation as a Bitcoin proxy.
Why is MicroStrategy considered a Bitcoin proxy?
MicroStrategy holds over 420,000 Bitcoins, making it the largest corporate owner of the cryptocurrency. This strategic investment aligns the stock’s performance closely with Bitcoin’s price movements.
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