To add Nasdaq MicroStrategy to the Nasdaq100 Index
The Nasdaq exchange has announced its annual revision of the top 100 largest non-financial companies by market capitalization and is adding MicroStrategy to the list for the first time. Microstrategy's share price growth, fueled by Bitcoin's positive performance, has seen its market capitalize, making it eligible for inclusion. MicroStrategy shares are exposed to passive investment opportunities by being included in Invesco QQQ and other ETFs that invest in the top companies of the Nasdaq.
The Nasdaq 100 index tracks the 100 largest companies on the Nasdaq exchange. The companies included are often recipients of flows from popular ETFs.
With a capitalization of $97.94 billion, MicroStrategy is the 40th largest company on the Nasdaq exchange, largely due to its Bitcoin treasury. The company's stock price has increased by 505% since the beginning of the year, bringing its market capitalization to its current value of $15 billion on January 2, 2024.
Increasing the stock of micro-strategy
MicroStrategy's impressive stock price run from August 2020 to December 2024 was driven by its Bitcoin acquisition efforts and turned the company into a quasi-Bitcoin ETF.
Overall, the company issued debt notes at an average of $58,200 and issued $23.41 billion in Bitcoin. His bitcoin stash is worth $42 billion in market capitalization at the time of publication.
Greater exposure to investors
MSTR's inclusion in the NAS100 exposes it to additional investors and funds that invest in the Nasdaq index. The largest fund to do so is the Invesco QQQ Trust at $352 billion, but other multibillion-dollar funds invest in companies in the NAS100, such as the iShares NASDAQ 100 UCITS ETF.
However, it is important to note that not all companies in the Nasdaq 100 receive equal weight. For example, the Invesco QQQ ETF allocates approximately 53.1% of its portfolio to the top 10 companies on the Nasdaq exchange, with the rest spread across the top 90 companies.
Nevertheless, 0.1% of the $352 billion pie is still significant.
It's not all positive news
Although Nasdaq's annual rebalancing includes micro-strategy, the criteria for inclusion of companies in the index is the primary source of their market value.
MicroStrategy remains a provider of business intelligence technology and solutions, but if a large portion of its value comes from its Bitcoin holdings, it may be classified as a financial company and removed from the Nasdaq 100.
The Nasdaq rebalancing will take effect on December 23, when bitcoin is trading at $102,800 as of press time.
