Bitcoin buyer MicroStrategy jumps on Nasdaq 100 entry (updated)

Axon Enterprise

16/12/2024 09:41

(Updates with U.S. premarket prices, adds market value in
paragraph 10)
    By Medha Singh
       Dec 16 (Reuters) - MicroStrategy  MSTR.O  shares rose 6%
in premarket trading on Monday as the software company and
bitcoin buyer was set to join the tech-heavy Nasdaq 100 index
that could further strengthen a rally in the stock.
    The $25.7 trillion index that houses the largest
non-financial companies will now gain indirect exposure to
bitcoin via MicroStrategy, which holds $44 billion worth of the
digital currency on its balance sheet, about 2% of the total
supply of the world's largest cryptocurrency.
    The prospect of more buying from funds that track the Nasdaq
100 could further boost MicroStrategy's stock that has surged
nearly 550% this year alongside a jump in bitcoin price.
    The company has more than doubled its bitcoin holdings this
year through equity and debt deals.
    It could be "the start of a looping cycle of capital that
could potentially drive up the spot BTC price," said Matthew
Dibb, chief investment officer at cryptocurrency asset manager
Astronaut Capital.
    "ETFs such as QQQ and many others would buy MicroStrategy to
mirror holdings of the index, therefore driving up the price,
and in turn, allowing MicroStrategy to purchase more BTC through
debt, bond and equity offerings."
    The largest exchange-traded fund tracking the Nasdaq-100 is
the $322 billion Invesco QQQ Trust  QQQ.O , according to
Morningstar.
    Bitcoin surged to a record high above $106,000 on Monday
after President-elect Donald Trump suggested he plans to create
a U.S. bitcoin strategic reserve similar to its strategic oil
reserve.
    MicroStrategy's shares have gained 3,200% since adopting
bitcoin as its treasury asset in 2020 under the leadership of
co-founder Michael Saylor. It reported a net loss of $340
million in the three months ended Sept. 20, its third
consecutive quarterly loss.
    The company's market capitalization rose to more than $100
billion based on the latest premarket share price, more than
twice the value of its bitcoin stockpile.
    "Longer term this is a huge milestone for crypto and we are
bound to hear the voices, both bulls and bears, get a lot louder
talking about MicroStrategy and Saylor in the months to come,"
Dibb said.
    Other entrants to the Nasdaq 100 include Palantir  PLTR.O 
and Axon Enterprise  AXON.O , Nasdaq said late on Friday,
replacing Illumina  ILMN.O , Super Micro  SMCI.O  and Moderna
 MRNA.O . The reconstituted index will begin trading on Dec. 23.
    Super Micro shares tumbled 10.6%, while Palantir rose 2.1%.

 (Reporting by Medha Singh in Bengaluru, Editing by Louise
Heavens and Shounak Dasgupta)
 ((Medha.Singh@thomsonreuters.com; +91 80 6210 0592; X, formerly
Twitter: @medhasinghs))