MicroStrategy Could Soon Enter the S&P 500
MicroStrategy, the largest company holding Bitcoin, is on track to join the S&P 500, establishing itself as one of the top 500 companies in the United States. After the recent Bitcoin rally, MicroStrategy’s stock has soared, bringing its market capitalization to $12 billion. With just another $2 billion needed to make the big leap, entering the S&P 500 would expose MicroStrategy’s stock in “almost all investment portfolios,” creating a positive flow of buyers.
Rising Market Capitalization and TTM Profitability
MicroStrategy could soon qualify to join the S&P 500 after its market capitalization rose to $12 billion following the recent Bitcoin pump that brought the crypto to the $52,000 area. Currently worth precisely $11.41 billion, MicroStrategy only needs another $2 billion more to climb 59 positions and be added to the revered index.
- The company must meet strict criteria for eligibility, including recording a positive sum of profits in the four previous quarters and ensuring an increase in market capitalization.
- Under current rules, MSTR should rise to $937 USD per share to be eligible for candidacy.
- The S&P executive committee reserves the right to approve or reject the listing even if MicroStrategy meets all requirements.
Positive Flow of Money and Mainstream Diffusion
If included in the S&P 500, MicroStrategy would trigger a positive flow of money from investors who indirectly expose themselves to its stock when buying products linked to the index. Despite having a weight of just 0.01%, MicroStrategy could absorb $12 billion in passive capital allocation from an index with a market capitalization of $41.9 trillion.
- The inclusion would also increase mainstream diffusion of BTC as it enters investors’ portfolios through traditional pension funds and portfolios.
- MicroStrategy’s portfolio has an overall position of 190,000 BTC and is currently worth $9.87 billion.
Hot Take: A Plausible Inclusion in the S&P 500 Index
If Bitcoin’s bullish strength continues in the coming months, it is very likely that MSTR stock will grow at a similar pace, making its possible inclusion in the S&P 500 increasingly plausible.
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