In an important step, MicroStrategy Inc. MSTR It looks like it will join the Nasdaq 100 index, leading to a major rebuild of the index. This change, based on November 29 market capitalizations, will take effect after December 20.
What happened: According to a report Through Looking for Alpha, the inclusion of MicroStrategy, with a market cap of $94 billion, will impact passive funds that track the index, such as the Invesco QQQ Trust QQQ and the Invesco Nasdaq100 QQQM.
These funds, together with the Global X Nasdaq 100 covered call QYLDwill have to adjust their positions by December 20 to include MicroStrategy.
MicroStrategy’s entry into the NASDAQ 100 introduces Bitcoin exposure to passive investors, as the company controls nearly 2% of the Bitcoin supply. MicroStrategy’s strategy is known for issuing shares to buy Bitcoin and could influence the dynamics of the index.
See also: MicroStrategy’s Michael Saylor calls Bitcoin the ‘Manhattan in Cyberspace’ and says it’s an asset you’d expect to ‘last 1,000 years’
The reconstruction could result in higher turnover and potential tracking errors for ETFs as they will need to rebalance their portfolios to accommodate MicroStrategy’s growing market cap. This unique situation could lead to strategic trading opportunities for investors.
Why it matters: MicroStrategy’s potential inclusion in the NASDAQ 100 is a testament to its growing influence in the financial markets, especially due to its aggressive Bitcoin strategy.
Recently, Bernstein described MicroStrategy as a ‘Bitcoin magnet’ and predicted that it could own 4% of the global Bitcoin supply by 2033. However, this strategy is not without risks, as some analysts warn about its long-term viability.
Additional, Michael Saylorco-founder of MicroStrategy, recently revealed that the company is reportedly generating significant profits from its Bitcoin holdings Making $500 million a day as Bitcoin approaches $100,000.
This has contributed to a surge in MicroStrategy’s shares, which have risen 465% since the beginning of the year, which has had a significant impact on ETFs linked to its performance, as shown in a report. recent report.
MicroStrategy’s recent $3 billion offering of 0% convertible senior notes, which closed quickly, underlines this investors’ confidence in its strategy. These notes offer no interest but allow participation in the stock price, reflecting market demand for exposure to MicroStrategy’s Bitcoin-driven growth.
Price promotion: Bitcoin was hovering at $96,776 at the time of writing, up 0.46% in the past 24 hours, according to data from Benzinga Pro.
MicroStrategy shares closed Friday at $387.47, down slightly 0.35%. Year-to-date, the stock is up 465%.
MicroStrategy stock has a consensus rating of ‘Buy’ Benzinga Pro Data. The high price target is $690, while the consensus price target is $449.50, implying an upside of 16%.
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Photo courtesy: MicroStrategy
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