MicroStrategy, headed by Bitcoin billionaire Michael Saylor, announced a 10-for-1 stock split, making its shares more accessible to smaller investors. The split will grant nine additional shares to all existing shareholders for every one they own, taking place after August 7. While a stock split does not change an investor’s stake in the company fundamentally, it can be dilutive to individual share values. The move is expected to increase interest in trading options on MSTR.
The stock split comes as MicroStrategy’s shares traded at $1305, the minimum threshold for exposure to the company. With the stock soaring to $1919 at its peak in March and jumping 5% post-announcement, MicroStrategy has become a leveraged play on Bitcoin for investors. The company holds a significant amount of Bitcoin on its balance sheet, making it the world’s largest corporate holder of the cryptocurrency. Despite carrying 226,331 BTC worth $13.33 billion, MicroStrategy’s market cap stands at $23.16 billion.
MicroStrategy’s aggressive accumulation of Bitcoin has raised concerns among some analysts. Kerrisdale Capital previously criticized the company’s Bitcoin premium as “unjustifiable,” calling for a considerable drawdown in its stock value relative to its BTC holdings. However, as the stock split aims to make shares more accessible to a broader pool of investors, it may spur increased trading activity and options strategies on MSTR. With the split set to occur after August 7, the market will closely monitor the impact on MicroStrategy’s stock price.
According to MicroStrategy, the stock split will be carried out via a stock dividend to shareholders of record as of August 1, 2024. This move is part of the company’s strategy to enhance accessibility for investors looking to participate in its high-flying stock. With the split-adjusted trading expected to commence on August 8, MicroStrategy is positioning itself to attract a wider range of investors. Additionally, industry experts believe that the split will enable market makers to offer call options on MSTR, potentially leading to increased trading volumes and liquidity.
Financial analysts and market observers view MicroStrategy’s stock split as a strategic move to expand its investor base and unlock new growth opportunities. By making its shares more affordable, the company aims to attract retail investors and increase liquidity in its stock. With its significant holdings of Bitcoin and the recent surge in its stock price, MicroStrategy is positioning itself as a unique investment option for those looking to gain exposure to both the cryptocurrency market and the tech sector. As the stock split unfolds in the coming weeks, all eyes will be on MicroStrategy’s performance in the market and the impact on its valuation.
