How MicroStrategy’s Bitcoin Gambling Will Make Nasdaq-100 Entry ‘Challenging’ – DL News

The ever-growing Bitcoin supply of $37 billion has catapulted MicroStrategy into the ranks of the most valuable US technology companies.

But analysts doubt that the software company’s skyrocketing $89 billion valuation will be enough to secure it a spot in the prestigious Nasdaq 100 index.

Joe Nardini, head of investment banking at investment firm B. Riley Securities, said DL News that the official Nasdaq 100 inclusion criteria state that in order to be eligible, a company cannot be classified as a financial industry company.

“If the exchange views Bitcoin as a financial instrument, it would be difficult to add MSTR,” Nardini added. “If they believe the argument that Bitcoin is really software, then they have a chance.”

The Bitcoin double bond

With founder and CEO Michael Saylor leading the Bitcoin acquisition approach, MicroStrategy has become the largest single Bitcoin holder after the cryptocurrency’s mysterious founder, Satoshi Nakamoto.

For many investors, MicroStrategy serves as a proxy for Bitcoin, allowing them to access the asset without having to deal with crypto exchanges.

The launch of US spot Bitcoin exchange-traded funds run by investment giants such as BlackRock has called into question its role as a proxy.

By listing on the Nasdaq-100, MicroStrategy stock could be included in index funds like QQQ, which would further increase its exposure.

“Just based on size, they would be added,” Nardini said. MicroStrategy’s market capitalization would place the company somewhere in the middle of the Nasdaq 100 index, around competitors like Intel and CrowdStrike.

Nasdaq did not comment on whether MicroStrategy will be added to the index when it rebalances in mid-December. It simply communicated its listing standards DL News in response to our emails.

MicroStrategy did not respond to a request for comment.

S&P 500

MicroStrategy’s reach would be even greater if the company also managed to secure a spot in the S&P 500.

According to Seoyoung Kim, an associate professor of finance at Santa Clara University’s Leavey School of Business, MicroStrategy’s S&P 500 inclusion is “probably not going to happen anytime soon,” largely due to its consistently negative bottom line CoinTelegraph.

To be eligible for inclusion in the S&P 500, a company must have reported positive earnings in both the last quarter and the last four quarters.

So far in 2024, MicroStrategy has reported net operating losses of more than $400 million each quarter.

Kyle Baird is the weekend editor of DL News. Do you have a tip? Email to [email protected].