This season can truly be classified as stock-split summer. Just after Nvidia (NASDAQ:NVDA) successfully enacted a 10-for-1 stock split, Broadcom (NASDAQ:AVGO) announced plans to do the same. Now, another leading tech company has opted to join the trend.
Business analytics innovator MicroStrategy (NASDAQ:MSTR) will be enacting a stock split on Aug. 1, also on a 10-for-1 basis. The company is well-known for its Bitcoin (BTC-USD) investments, which have catapulted MSTR stock to impressive heights this year as the crypto has surged.
Investors have the chance to see their MSTR stock holdings increase if they are holding shares by Aug. 1. But does it make more sense to wait to load up on shares until the MicroStrategy stock split has lowered prices? Let’s dive into what to expect.
MSTR Stock: A Pre-Split Buy?
MicroStrategy is a key example of what can happen when a company doubles down on Bitcoin and lets it gradually boost share prices. Despite dipping earlier this month, MSTR stock has surged more than 150% over the past six months, enjoying the momentum spurred by the early 2024 crypto rally. This winning streak has taken MSTR stock to over $1500 per share at one point.
With that in mind, it makes perfect sense that the company would be opting to lower share prices organically by splitting its stock. Executive Chairman Michael Saylor announced the news this morning in a post to X:
For investors, the stock split will mean the chance to acquire MSTR stock at a conveniently lower price. Stock splits are enacted when a company wants to make its shares more accessible to new investors, specifically those outside the institutional investing community. And MicroStrategy has plenty going for it. As InvestorPlace contributor Joel Baglole reports:
“MicroStrategy, which technically remains a software business, now holds 226,331 bitcoins worth around $15 billion based on the digital coin’s current price. MicroStrategy buys more Bitcoin every time the price pulls back. The company’s Bitcoin holdings have been purchased at an average price of $36,798, meaning the company is sitting on a healthy profit with its position. MicroStrategy is now the largest corporate holder of Bitcoin in the world, having first started to acquire the cryptocurrency in 2020.”
Baglole notes that, while this heavy Bitcoin exposure may make some investors cautious, it has clearly paid off as a strategy. MSTR stock has gradually risen more than 220% over the past one year, demonstrating hard-to-ignore growth.
What Comes Next?
While the MicroStrategy stock split takes effect on Aug. 1, MSTR stock will begin trading on a split-adjusted basis on Aug. 8. With shares currently hovering at just below $1350, it may make sense for investors to wait to load up until after the split has brought prices down.
The company will be in an excellent position to continue rising in the third quarter as momentum for both artificial intelligence (AI) and Bitcoin continues to drive up tech stocks. MicroStrategy’s high crypto exposure has earned it a reputation as a speculative play in some circles. But as noted, holding excessive amounts of BTC has turned it into one of this year’s success stories. Retail investors who like crypto will likely rush to buy up MSTR stock after the split takes effect.
On the date of publication, Samuel O’Brient held a LONG position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
