MicroStrategy stock news: Inclusion in Nasdaq 100 Could Trigger Fund Inflows

In a significant move, MicroStrategy stock (MSTR) looks set to join the Nasdaq 100 index, prompting a major reconstitution of the index, this change, based on market cap rankings as of Nov. 29, will take effect after Dec. 20.

MicroStrategy's Nasdaq 100 Inclusion Set to Impact Passive Funds

According to a report from Seeking Alpha, MicroStrategy stock's inclusion in the Nasdaq 100, which boasts a market cap of $94 billion, will influence passive funds that track the index, including the Invesco QQQ Trust and the Invesco Nasdaq 100 fund.

These funds, along with the Global X Nasdaq 100 Covered Call ETF, will need to adjust their portfolios to incorporate MicroStrategy by December 20.

MicroStrategy’s addition to the NASDAQ 100 provides Bitcoin exposure to passive investors, as the company holds nearly 2% of the total Bitcoin supply. Known for its strategy of raising capital through stock issuance to purchase Bitcoin, MicroStrategy stock could significantly impact the dynamics of the index.

Implications for ETFs and Bitcoin Strategy Risks

The reconstitution may lead to increased turnover and possible tracking errors for ETFs, as they will need to rebalance their portfolios to reflect MicroStrategy’s expanding market cap. This unique scenario could create strategic trading opportunities for investors.

MicroStrategy stock’s potential inclusion in the NASDAQ 100 highlights its growing influence in the financial markets, largely driven by its aggressive Bitcoin strategy.
Recently, Bernstein referred to MicroStrategy as a “Bitcoin magnet,” forecasting that it could hold 4% of the global Bitcoin supply by 2033. However, this strategy carries risks, with some analysts expressing concerns about its long-term sustainability.

Michael Saylor, co-founder of MicroStrategy, recently disclosed that the company is reaping significant profits from its Bitcoin holdings, reportedly earning $500 million a day as Bitcoin approaches $100,000.

This remarkable performance has led to a 465% increase in MicroStrategy’s stock year-to-date, greatly influencing ETFs associated with its performance, as highlighted in a recent report.

The company's swift completion of a $3 billion offering of 0% convertible senior notes further emphasizes investor confidence in its strategy. While these notes carry no interest, they allow investors to participate in potential equity gains, reflecting strong market demand for exposure to MicroStrategy’s Bitcoin-driven growth.

Price Action

At the time of writing, Bitcoin was priced at $96,776, marking a 0.46% increase in the last 24 hours, according to Benzinga Pro data. MicroStrategy stock closed at $387.47 on Friday, experiencing a slight decline of 0.35%, but still boasting a remarkable 465% gain year-to-date.

According to Benzinga Pro data, MicroStrategy stock has a consensus rating of "Buy." The highest price target is set at $690, while the consensus price target stands at $449.50, indicating a potential upside of 16%.

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