Key Takeaways
- MicroStrategy is likely to be included in the Nasdaq-100 index, pending its classification as a technology company.
- ETFs tracking the Nasdaq-100 may need to buy MicroStrategy shares if included, impacting its stock trading.
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Nasdaq is expected to announce its annual reconstitution of the Nasdaq-100 index today, which could result in a number of companies, including MicroStrategy, being added.
According to Bloomberg Intelligence ETF analyst James Seyffart, MicroStrategy meets several criteria for inclusion in the Nasdaq-100, including its classification as a technology company based on revenue sources.
However, Seyffart noted that MicroStrategy might not be added due to a potential reclassification as a financial stock. The Nasdaq-100 excludes financial institutions like banks and insurance companies.
While MicroStrategy’s software business is a small part of its overall value—the company’s value is now largely tied to its Bitcoin holdings—it is currently still classified as a software company.
The Industry Classification Benchmark could reclassify MicroStrategy, though Seyffart believes this process hasn’t begun.
It’s unclear whether this potential future reclassification will be considered in Nasdaq’s decision. But technically, if MicroStrategy maintains its classification during Nasdaq’s rebalancing announcement, it has a strong chance of inclusion.
The annual changes are expected to be announced this evening, typically around 8 p.m. ET, based on…
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