(Reuters) – MicroStrategy said on Friday it would be added to the tech-heavy Nasdaq-100 index, following a surge in shares of bitcoin buyers.
Nasdaq said the change takes effect before the market opens on December 23.
Inclusion in the index usually boosts the stock price, as exchange-traded funds looking to replicate the index's performance buy shares of the newly listed company.
Data analytics company Palantir Technologies (NASDAQ:) and Taser maker Axon Enterprise (NASDAQ:) have been added to the Nasdaq-100 along with MicroStrategy. Gene sequencing equipment maker Illumina (NASDAQ:), AI server maker Super Micro Computer (NASDAQ:) and vaccine maker accident Nasdaq said: (NASDAQ:) has been removed.
MicroStrategy, an aggressive investor in the world's largest cryptocurrency assets, has seen its shares rise more than six-fold this year, pushing its market capitalization to nearly $94 billion.
The company began buying and holding bitcoin in 2020 as revenues from its software business dwindled. It is now the largest holder of the cryptocurrency.
MicroStrategy's decision to buy bitcoin to protect the value of its reserve assets has boosted the appeal of its shares, which tend to align with the cryptocurrency's performance, analysts said.
Bernstein analysts expect that the market is likely to set its sights on a MicroStrategy listing in 2025 after the Nasdaq-100 listing.
The brokerage also sees the company's prospects continuing to improve next year, adding that it expects “more visibility and recognition beyond new ETF inflows”, as a result of the Nasdaq 100 inclusion.
They have risen in recent weeks as the victory of US President-elect Donald Trump has increased the cryptocurrency sector's hopes of easing regulatory barriers. Earlier this month, the digital asset jumped above $100,000 for the first time.
“Management has shown no signs of slowing (bitcoin buying) and is comfortable buying bitcoin in the $95,000 to $100,000 range,” Bernstein analysts said.
The company owns approximately 423,650 bitcoins purchased for approximately $25.6 billion based on the average purchase price as of December 8. The investment is worth about $42.43 billion, based on Bitcoin's previous close, according to Reuters calculations.
