Table of Contents
ToggleThe Variable in Microstrategy's Inclusion of QQQ
According to previous reports by Zombit, Microstrategy, a US-listed company known for investing in Bit, has met all the conditions for inclusion in the Nasdaq 100 index, which may result in its inclusion in the ETF during this month's annual rebalancing, triggering a stock acquisition of approximately $2.1 Bit.
However, according to a Bloomberg report, market observers are considering the possibility that the company may be rejected from the annual rebalancing, as Microstrategy's stock price has soared solely due to its leveraged Bit bet, and it is still essentially a small software company, with many believing it should not be included in the Nasdaq 100.
In this regard, TD Cowen analyst Lance Vitanza spoke up for Microstrategy, stating that the idea of the index is that it should truly reflect the state of all stocks in the market, and he has a "Buy" rating on Microstrategy, as he believes any large company (including Microstrategy) occupying an important part of the Nasdaq market should be reflected in the index.
However, Lance Vitanza emphasized that Nasdaq can still use "Microstrategy's small business scale" as a reason for not including it in the index.
Is Microstrategy a Tech Company or a Financial Company?
Microstrategy's current main business is still classified as a tech company, focusing on software business, which meets the inclusion criteria of the Nasdaq 100 index. But Bloomberg intelligence analyst James Seyffart said that ICB may reclassify Microstrategy as a financial stock in the next change in March next year, and this change would be unfavorable for Microstrategy, as financial companies do not qualify for the Nasdaq 100.
RIA Advisors portfolio manager Michael Lebowitz said that Microstrategy is now more like a commodity or ETF, as it is essentially a company that "would die without Bit". He believes it should be reclassified as a financial company next year. Michael Lebowitz said in an interview:
"The company's 100% value comes from Bit, because the rest of it may be negative. A large part of the company is its Bit holdings and the financial operations around it, so it is a financial company."
How to Influence Microstrategy
If the company is included in the index, the increase in trading volume of its shares may not have a significant impact on its liquidity, but it will attract new investors, said TD Cowen analyst Lance Vitanza:
"If you consider the liquidity and the number of shares traded in this stock, it's not that much. But it will bring in new money, so I think ultimately the people who own this stock are very different from those who buy it at the market price."
