MSTR to enter Nasdaq 100? We’ll know soon.

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MicroStrategy could later this month join the Nasdaq 100, which includes many of the largest non-financial, Nasdaq-listed companies.

A Nasdaq spokesperson told me changes to the index would be announced tonight at 8 pm ET. Adjustments would go into effect on Dec. 23. 

MicroStrategy’s market capitalization stands around $95 billion and appears to meet the requirements for inclusion, analysts say.  

But the Nasdaq committee’s decision could depend on MSTR’s ICB classification, Bloomberg Intelligence analyst James Seyffart mentioned in a recent research note. Much of the company’s share performance is linked to financial engineering derived from its bitcoin buys, he explained; whether this could make it a “financial” stock (and ineligible) remains to be seen.

While TD Cowen analyst Lance Vitanza puts odds of MSTR’s Nasdaq 100 inclusion in the 60-80% range (noting its operating software business sets it apart from traditional financial companies), he told me he wouldn’t be surprised if it was kept out.

Benchmark’s Mark Palmer said the stock — already up 480% this year — could see another boost as Nasdaq 100 inclusion would enable MSTR to benefit from giant passive funds (like Invesco’s QQQ) buying blocks of shares. 

Vitanza said he isn’t so sure inclusion in the index would cause any sort of price spike. Still, it would certainly broaden the universe of investors, he added, which would augment the company’s long-term access to capital.

TD Cowen analysts raised their price target for the stock from $525 to $550 on Monday. MSTR shares were trading at ~$397 at 2 pm ET.

“If they were to be kept out of the index,” he told me, “that would not change our view of the stock one iota.”

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