MicroStrategy Sets 10-for-1 Stock Split Four Months After Bitcoin Peak

MicroStrategy, the company known for being the largest corporate holder of bitcoin, announced a 10-for-one stock split on Thursday. The announcement comes after a four-month lull in the price of bitcoin, which has been stuck in a tight trading range since March.

Despite the stock split announcement, MicroStrategy‘s shares only rose about 6%. This leaves them still about 34% lower than their all-time high of $1,999.99, which they reached in March of this year.

The company stated that the reason for the stock split is “to make MicroStrategy’s stock more accessible to investors and employees.” They will accomplish this by splitting the shares into class A common stock and class B common stock.

MicroStrategy’s Bitcoin Bet and Future Outlook

The stock split announcement comes amidst a period of relative stagnation for bitcoin. The leading cryptocurrency’s price has been stuck in a tight range since March, although many investors remain optimistic about a rebound in the second half of 2024.

MicroStrategy’s decision to split their stock follows a significant shift in their company focus. Originally a provider of enterprise software, they began aggressively acquiring bitcoin in 2020. This strategy has transformed them into a company whose stock price is seen as a reflection of the overall price of bitcoin. In fact, they went a step further this February by announcing a shift in focus and branding towards bitcoin development.

Analysts at Bernstein are bullish on MicroStrategy’s future, estimating an 80% upside potential. This optimism likely stems from their position as the “world’s largest bitcoin company,” as Bernstein phrased it.

Looking at year-to-date performance, MicroStrategy’s stock has significantly outpaced bitcoin itself. The company’s stock is up 106% so far in 2024, compared to bitcoin’s more modest 38% gain. When looking at the past year, the trend continues. MicroStrategy boasts a 216% increase, while bitcoin has only grown by 91%.

While the price of bitcoin remains stagnant, MicroStrategy’s stock split and continued focus on the cryptocurrency suggest they are confident in a future price increase. Only time will tell if this strategy pays off, but one thing is certain: MicroStrategy has become a key player in the world of bitcoin.