As an analyst with over two decades of experience in the financial markets, I have witnessed numerous transformations in the tech sector and beyond. The addition of MicroStrategy Inc., Palantir Technologies Inc., and Axon Enterprise, Inc. to the Nasdaq-100 Index is a testament to the dynamic nature of this vibrant exchange.
On December 13th, the Nasdaq Stock Exchange, established in 1971 and known for its pioneering electronic trading system and housing numerous global tech giants, declared that MicroStrategy Inc., one of its listed companies, will be included in the Nasdaq-100 Index starting from December 23rd. This index, launched in January 1985, monitors the performance of the top 100 non-financial companies by market capitalization listed on the Nasdaq exchange.
It’s important to note that while Nasdaq-100 and QQQ might seem similar, they are actually different. The Nasdaq-100 is an index, which is a statistical measure of market activity, whereas QQQ is an Exchange-Traded Fund, or ETF. QQQ, officially called the Invesco QQQ Trust, is an ETF that follows the performance of the Nasdaq-100 index. This means that by investing in QQQ, you are essentially buying a single product that gives you exposure to the companies within the Nasdaq-100 index.
In addition, Nasdaq revealed that not only MicroStrategy, but also Palantir Technologies Inc. (PLTR) and Axon Enterprise, Inc. (traded as AXON on Nasdaq), will be included in the Nasdaq-100 index.
Although Nasdaq is best known for being the world’s premier exchange for tech firms, in reality it hosts firms from a diverse array of sectors. Another index launched at the same time as the Nasdaq-100 is the Nasdaq Financial-100 Index, which consists of the the 100 largest (by market cap) financial firms.
As an analyst, I’d put it this way: “I work with the Nasdaq-100 index which undergoes an annual reconstitution around December, strategically synchronized with the quadruple witch expiration Friday of the quarter. This means the changes take effect just as the market opens, typically in mid to late December.
Being included in the Nasdaq-100 is a significant achievement for tech companies, and it’s difficult to conceive MicroStrategy making it without co-founder Michael Saylor and his fervent support for Bitcoin. Despite the company’s struggling software business reporting decreasing revenue and escalating losses according to its latest financial results for Q3 2024, with a revenue of $116.1 million and a net loss of $340 million, Mr. Saylor’s unwavering faith in Bitcoin may have played a crucial role in the firm’s inclusion.
As an analyst, I’ve been pondering over why MicroStrategy’s market cap stands at approximately $98 billion. The answer lies in a strategic move announced in August 2020 – the decision to adopt Bitcoin (BTC) as their primary treasury reserve asset. This bold step was accompanied by their disclosure of having purchased 21,454 bitcoins for an aggregate cost of $250 million. Under the leadership of Michael Saylor, MicroStrategy has significantly invested in Bitcoin and consistently added more to its holdings.
By December 9th, the company had amassed approximately 423,650 Bitcoins, currently worth an estimated $43 billion. This substantial collection was accumulated at a total cost of around $25.6 billion, making it the largest corporate Bitcoin holder in existence.
MicroStrategy recently purchased approximately 21,550 Bitcoins for around $2.1 billion, with each Bitcoin costing about $98,783. This acquisition has resulted in a Quarter-to-Date (QTD) Bitcoin Yield of 43.2% and Year-to-Date (YTD) yield of 68.7%. As of December 8, 2024, we hold approximately 423,650 Bitcoins that were acquired for around $25.6 billion, with each Bitcoin costing approximately $60,324. $MSTR
— Michael Saylor⚡️ (@saylor) December 9, 2024
46.9% of MicroStrategy’s total market value can be traced back to its Bitcoin investments, with the remaining 53.1% reflecting the value of its main operations, additional assets, and an added value attributed to its Bitcoin approach.
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2024-12-14 12:55