- MicroStrategy, a Nasdaq-listed software firm and the largest corporate holder of bitcoin (BTC), announced on Thursday that its board of directors has approved a 10-for-1 stock split of its class A and class B common stock.
- The 10-for-1 stock split is significant for several reasons.
OUR TAKE
MicroStrategy’s stock split is a clever move, like offering bitcoin slices to the masses. It’s the same thing Tesla did with its own stock split. MicroStrategy’s got a similar effect going, tapping into retail investor appetite. With Michael Saylor leading the charge, they’re making their bitcoin-loaded stock more palatable. But let’s see if the market bites – history shows splits can boost liquidity, but not always translate to long-term gains.
–Miurio huang, BTW reporter
What happened
MicroStrategy, a Nasdaq-listed software firm and the largest corporate holder of bitcoin (BTC), announced on Thursday that its board of directors has approved a 10-for-1 stock split of its class A and class B common stock.
This decision has led to a 4% increase in the company’s share price before the market opened.
The split will take effect on August 1, with shares being distributed after the market closes on August 7.
Shareholders will receive nine additional shares for each share they currently own.
The company’s stock was last trading at $1,363 premarket, and this move aims to make the stock more accessible to investors and employees.
MicroStrategy’s strategic purchase of bitcoin to safeguard the value of its reserve assets has bolstered the attractiveness of its stock.
The firm’s share price has more than tripled in the past year, reaching an all-time high of over $1,900 in March as bitcoin surged past $70,000.
The company’s shares have surged 107% so far in 2024, while bitcoin has risen roughly 40% over the same period. Led by executive chairman Michael Saylor, a well-known bitcoin advocate, MicroStrategy has become synonymous with bitcoin investment, regularly issuing corporate debt to fund additional bitcoin purchases.
As of its latest acquisition last month, the company holds 226,331 BTC, valued at over $13 billion.
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Why it’s important
The 10-for-1 stock split is significant for several reasons.
Firstly, it makes MicroStrategy’s stock more accessible to a broader range of investors, including smaller retail investors, by reducing the share price. This is particularly relevant at a time when many trading platforms offer fractional shares, but psychological barriers may still exist for potential investors when share prices are high. The split could potentially attract more investors, increasing the stock’s liquidity and market participation.
Furthermore, MicroStrategy’s substantial investment in bitcoin and its correlation with the cryptocurrency’s performance highlight the company’s pivotal role in the intersection of traditional finance and digital assets. As the largest corporate bitcoin holder, MicroStrategy’s financial moves and stock performance are closely watched by both the technology and financial sectors. The stock split, therefore, not only reflects the company’s recent success but also its commitment to maintaining a strong presence in the evolving financial landscape.
