Microstrategy Could Be Added to the Nasdaq 100 This Month: What It Means

Microstrategy, a business intelligence and analytics firm, is reportedly being considered for addition to the Nasdaq 100 index this month.

This would mark a significant milestone for the company, which has seen its stock price surge in recent years.

The Nasdaq 100 is a widely followed index that tracks the performance of the 100 largest non-financial stocks listed on the Nasdaq exchange.

If Microstrategy is added, it would likely attract more investor attention and potentially drive up its stock price.

The Nasdaq 100 index is a stock index that includes the largest 100 non-financial companies listed on the Nasdaq exchange.

It's a weighted index, meaning that the weight of the different stocks is proportional to their market capitalization, which is a measure of a company's total value.

The Nasdaq 100 index was created in 1985 and is important because the Nasdaq is still the most active exchange in the USA by trading volume, as well as the second in market capitalization after the NYSE.

Suggestion: First Foundation Bank Money Market Rates

The five largest companies in the world by market capitalization, the only ones above 2,000 billion dollars, are all listed on the Nasdaq.

The Nasdaq 100 index tracks the top 100 non-financial firms listed on the Nasdaq exchange, featuring giants like Apple, Microsoft, Tesla, and Nvidia.

It excludes purely financial companies and also includes some foreign companies, making it distinct from the S&P 500 index.

The Nasdaq 100 index is a significant benchmark for the tech industry, and inclusion in it can have a major impact on a company's reputation and investment potential.

The index is also used as a benchmark for exchange-traded funds (ETFs) that replicate the Nasdaq 100, such as the Invesco QQQ, which will now incorporate MicroStrategy into their portfolios.

Here's an interesting read: What Is the Fortune 100 List

MicroStrategy's journey with Bitcoin began in mid-2020, when the price of Bitcoin was around $11,000 and the price of MSTR shares was around $15.

The company has never stopped accumulating Bitcoin since then, and it has widely surpassed 30,000 BTC by the end of 2020.

By mid-2021, MicroStrategy had surpassed 100,000 BTC, and in August of last year, it also surpassed 150,000 BTC.

In April of this year, the company had already come to possess more than 200,000 BTC, and by October, it had risen above 250,000.

Currently, MicroStrategy owns roughly 423,650 Bitcoin, valued at close to $42.4 billion.

This incredible growth has sent MSTR's stock high flying, with its stock surging more than sixfold this year, forcing the market capitalization of MicroStrategy to approach nearly $94 billion.

The market value of the 423,000 BTC MicroStrategy owns exceeds $41 billion, even though the company's market capitalization exceeds $80 billion.

Michael Saylor's vision for Bitcoin is not just limited to his company, but also aims to increase the adoption of Bitcoin among large corporations.

Recommended read: Indian Equity Market News

MicroStrategy's market capitalization has exceeded $80 billion, making it one of the top 250 companies in the world.

The company's stock price has shown significant volatility, ranging from below $70 at the beginning of the year to over $380 currently.

MicroStrategy's inclusion in the Nasdaq 100 could lead to massive inflows from Exchange-Traded Funds tracking the index, which could indirectly expose major pension funds, sovereign wealth funds, and individual retirement accounts to Bitcoin.

The QQQ Trust alone manages around $322 billion in assets and would typically buy shares in the companies within the index to mirror their portfolio.

MicroStrategy's business model has shifted significantly, with the company now investing heavily in Bitcoin, accumulating over 423,000 BTC with a market value exceeding $41 billion.

This move has contributed to the company's market capitalization exceeding $80 billion, making it a significant player in the financial world.

The inclusion of MicroStrategy in the Nasdaq 100 could have a domino effect, with major fund managers needing to gain exposure to Bitcoin or MicroStrategy's stock to keep pace with the index.

Explore further: Nasdaq 100 Index Funds

Bitcoin's price has been steadily increasing, reaching $96,776 at the time of writing, marking a 0.46% rise in the last 24 hours.

MicroStrategy stock, on the other hand, closed at $387.47 on Friday, experiencing a slight decline of 0.35% but still boasting a remarkable 465% gain year-to-date.

The consensus is clear, with a "Buy" rating from Benzinga Pro data, indicating a strong outlook for the stock.

The highest price target is set at $690, while the consensus price target stands at $449.50, suggesting a potential upside of 16%.

This significant price movement is a clear indicator of the stock's potential for growth, making it an attractive option for investors.