By Medha Singh
(Reuters) – A meteoric rise in shares of MicroStrategy (MSTR) has made the bitcoin hoarder a likely candidate for the tech-heavy Nasdaq 100 index ahead of an annual rebalance this week.
MicroStrategy’s stock price rose 6% before the bell on Wednesday.
The loss-making software company, an aggressive investor in the highly volatile cryptocurrency, has seen its shares rise nearly 500% this year, bringing its market capitalization to $90 billion.
The world’s largest cryptocurrency reached the $100,000 milestone for the first time last week and has doubled in value this year. It received a big boost after Donald Trump’s US election victory, as investors expect the president-elect to deliver on his promise of a crypto-friendly government.
An inclusion in the Nasdaq 100 could bring more gains for MicroStrategy, whose bitcoin holdings were valued at about $42 billion, as more investment firms include the stocks in their portfolios to accurately reflect the index composition.
To be included in the index, a share listed on the Nasdaq must be among the top 100 in terms of market value, have a minimum daily trading volume of 200,000 shares and not belong to the financial sector. The announcement of the rescheduling is expected after market close on Friday.
“MicroStrategy appears to meet all the requirements to make the Nasdaq 100 when it reconstitutes in December,” said Art Hogan, chief market strategist at B. Riley Wealth Management.
The potential addition could give the Nasdaq 100 index indirect exposure to bitcoin and could make related ETFs more attractive to a younger investor base, said Todd Rosenbluth, head of ETF research at VettaFi.
Data analytics company Palantir (PLTR), which has quadrupled in market value to $160 billion this year, is another likely candidate for inclusion in the index.
AI server maker Super Micro Computer (SMCI) could be among the companies removed from the index as it delayed the filing of its annual and quarterly reports. Super Micro CEO Charles Liang said on Tuesday he was confident the company would not be taken private.
Nasdaq did not respond to a Reuters request for comment.
Riding on bitcoin boom
MicroStrategy adopted bitcoin as its main treasury reserve in 2020 under the leadership of co-founder Michael Saylor, as revenue from its software business fell.
The company has amassed 400,000 bitcoins, making it the largest corporate holder of the digital asset. It financed its purchases through a combination of equity and debt transactions and controlled more than 2% of Bitcoin’s total supply, which is capped at 21 million.
