An announcement on whether the stock of serial Bitcoin (BTC) acquirer Strategy (MSTR) will be added to the benchmark S&P 500 index could come as soon as Sept. 5.
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Shareholders of Strategy, which was formerly known as MicroStrategy, have been hoping for the stock to be added to the S&P 500 for several quarters now, especially after the stock has risen 173% over the past 12 months and achieved a market capitalization of $96 billion. Strategy also recently posted one of the strongest quarters in its history.
An addition to the S&P 500 could be made in coming days as S&P Dow Jones, which manages the index, undertakes a quarterly rebalancing, adding and eliminating certain stocks based on their performance and market weighting. With consistent profitability, Strategy now meets all the requirements for inclusion in the S&P 500, analysts say.
Strong Performance
In this year’s second quarter, Strategy reported $10 billion in net income, equal to $32.60 of earnings per share (EPS). Revenue came in at $114.5 million, with subscription services rising nearly 70% year-over-year. While Strategy continues to operate a software unit, it is now primarily a Bitcoin acquirer.
As of June 30 this year, the company held 597,325 BTC on its balance sheet. Those holdings are worth $65.1 billion based on Bitcoin’s current price of $109,000 per digital token. Strategy highlighted a Bitcoin yield of 19.7% year-to-date during its Q2 results.
Analysts say Strategy’s addition to the S&P 500 index would underscore the growing role of Bitcoin and cryptocurrency in mainstream finance. If admitted, Strategy would be the first Bitcoin-treasury company to enter the benchmark U.S. index. Addition to the index typically lifts a stock’s price as mutual funds and exchange-traded funds (ETFs) that track the S&P 500 are required to buy shares.
Is MSTR Stock a Buy?
The stock of Strategy has a consensus Strong Buy rating among 14 Wall Street analysts. That rating is based on 12 Buy, one Hold, and one Sell recommendations made in the last three months. The average MSTR price target of $552.29 implies 65.15% upside from current levels.
