MicroStrategy Evaluated for Inclusion in the Nasdaq-100
- MicroStrategy Seeks Nasdaq-100 Inclusion in December
- Stocks rise on expectations and Bitcoin market
- Sector classification is crucial for index approval
MicroStrategy, known for its aggressive Bitcoin acquisition strategy, is under review for inclusion on the Nasdaq-100, an index that brings together the 100 largest non-financial companies on the Nasdaq. The decision, which will be based on eligibility criteria, will be announced on December 13, 2024. Currently, the company, led by Michael Saylor, owns about 3% of the entire Bitcoin supply in circulation, consolidating itself as one of the largest corporate holders of the cryptocurrency.
The possible inclusion directly reflects on the performance of its shares, which have risen by more than 6%, raising its market value to more than US$ 92 billion. If approved, the addition to the index could attract greater liquidity to the stock, since funds that track the Nasdaq-100 will start trading MicroStrategy shares.
However, the company’s eligibility depends on its sector classification. Although widely seen as a Bitcoin asset manager, MicroStrategy is still officially categorized as a software company, which could facilitate its entry into the index. This detail will be decisive for the committee’s final approval.
The inclusion in the Nasdaq-100 could represent a milestone for the integration of crypto companies into the traditional financial market. For many investors, MicroStrategy already serves as a way to access Bitcoin indirectly, without the need for direct transactions on exchanges. However, this approach also increases risks, as the company depends on the performance of the cryptocurrency.
Analysts point out that, in addition to the Nasdaq-100, the company also has its sights set on the SP 500, although the latter's criteria, such as consistent profitability, still represent a challenge for MicroStrategy, which reported significant losses in 2024.
Inclusion in the SP 500 would be an even bigger step for MicroStrategy. However, according to Seoyoung Kim, an associate professor of finance at Santa Clara University’s Leavey School of Business, that’s unlikely in the near term given the company’s negative financial results. To be eligible for the SP 500, a company must report positive earnings in its most recent quarter and the last four quarters combined. In 2024, MicroStrategy reported an operating loss in every quarter totaling more than $400 million.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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