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MicroStrategy to Split Stock 10:1 Amid Bitcoin Rally

MicroStrategy, the largest corporate bitcoin holder, announces a 10-for-1 stock split following a tripling of its share price due to the bitcoin rally. The split, effective August 1, aims to make shares more accessible to investors and employees.

1 min 51 secJuly 13, 2024
MicroStrategy to Split Stock 10:1 Amid Bitcoin Rally

How will MicroStrategy's stock split impact the market? Nasdaq-listed MicroStrategy (MSTR), known as the largest corporate holder of bitcoin (BTC), revealed a 10-for-1 stock split set for August 1, 2024. This move comes as the company’s share price has more than tripled over the past year. The rally has been driven by Bitcoin’s remarkable performance.

 

On August 7 after market close, shareholders will receive nine additional shares for each one they own. This split aims to make MicroStrategy’s stock more accessible. It targets investors and employees according to the company’s press release.

 

MicroStrategy’s stock hit a record high of over $1,900 in March. This was when BTC surged past $70,000. The company’s shares rose 6.8%. They reached $1,300 following the announcement. Led by Michael Saylor a prominent bitcoin advocate, MicroStrategy frequently issues corporate debt to acquire more BTC for its treasury. As of their latest purchase, the company holds 2,26,331 BTC valued at over $13 billion.

 

 

Why do companies split their stock? Stock splits are common for companies with significantly appreciated shares aiming to make the stock more psychologically accessible to smaller investors. Nvidia (NVDA) recently performed a similar split after its share price tripled in a year. This was fueled by the AI-driven equities rally.

 

Despite the recent rise, MicroStrategy’s shares remain about 34% below their March peak of $1999.99. This split occurs amidst a period of bitcoin price stability. Many investors anticipate a rebound in the latter half of the year.

 

 

MicroStrategy initially launched as an enterprise software provider. But it shifted focus in 2020. The company became a proxy for bitcoin’s price. In February, it announced a further shift towards bitcoin development. Analysts like Bernstein see substantial upside. They estimate an 80% growth potential for MicroStrategy which has already surged 106% this year compared to Bitcoin’s 38% gain.

 

In conclusion, MicroStrategy’s strategic stock split could enhance accessibility. It could potentially attract more investors reinforcing its position as a major player in the bitcoin market. Will this move pay off in the long run? Only time will tell.

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