MicroStrategy Announces 10-for-1 Stock Split
MicroStrategy (Nasdaq: MSTR) has announced a 10-for-1 stock split for its class A and class B common stock. This move aims to make the stock more accessible to investors and employees. Shareholders of record as of August 1, 2024, will receive nine additional shares for each share held. The distribution of the additional shares is expected to occur after the close of trading on August 7, 2024, with trading on a split-adjusted basis commencing on August 8, 2024. The stock split will not affect the voting and other rights of stockholders.
- The 10-for-1 stock split aims to increase accessibility for investors and employees.
- Shareholders will receive nine additional shares for each share held, potentially increasing liquidity.
- None.
Insights
The 10-for-1 stock split announced by MicroStrategy is primarily aimed at making the stock more accessible. By increasing the number of shares and reducing the price per share, the company aims to attract a broader base of investors, especially retail investors. A stock split does not change the intrinsic value of the company or dilute its ownership but lowers the price per share, which can psychologically make the stock seem more affordable and potentially increase trading volume.
From a short-term perspective, there might be a temporary surge in buying interest as the lower price could attract more retail investors. However, it's important for investors to understand that this does not change the underlying fundamentals of the company. In the long term, the effect of the stock split will largely depend on the company's performance and operational results. If the company continues to perform well, the stock could appreciate post-split just as it would have pre-split.
Stock splits are relatively common in the market and while they can be a sign of confidence from the company's management team, investors should focus on the core business performance, revenue growth and profitability rather than the split itself. For MicroStrategy, whose business includes significant cryptocurrency holdings, the overall market sentiment towards cryptocurrencies could also have an impact on stock performance post-split.
The announcement of a stock split by MicroStrategy is likely a strategic move to enhance liquidity and broaden its investor base. By reducing the share price through a stock split, the company hopes to make its shares more appealing to individual investors who might be deterred by a high price per share. This move often results in increased trading activity and potentially greater visibility in the market.
For retail investors, a lower share price can make it easier to buy shares without needing a large capital outlay. This can be particularly appealing in a market where fractional shares are not commonly traded. However, it is essential to keep in mind that the actual value of an investment doesn't change with a stock split; it is merely divided into more pieces.
MicroStrategy's decision to undertake a stock split also suggests confidence in future performance. The market generally views such moves positively, interpreting them as a signal that the company expects substantial future growth. However, investors should critically assess MicroStrategy's business model, revenue streams and market conditions before making investment decisions.
As a result of the dividend, each holder of a share of MicroStrategy’s class A common stock will receive nine (9) additional shares of class A common stock and each holder of a share of MicroStrategy’s class B common stock will receive nine (9) additional shares of class B common stock. In each case, the shares are expected to be distributed after the close of trading on August 7, 2024. Trading is expected to commence on a split-adjusted basis at market open on August 8, 2024. The stock dividend will not have any impact on the voting and other rights of stockholders.
About MicroStrategy Incorporated
MicroStrategy (Nasdaq: MSTR) considers itself the world’s first Bitcoin development company. We are a publicly-traded operating company committed to the continued development of the bitcoin network through our activities in the financial markets, advocacy and technology innovation. As an operating business, we are able to use cashflows as well as proceeds from equity and debt financings to accumulate bitcoin, which serves as our primary treasury reserve asset. We also develop and provide industry-leading AI-powered enterprise analytics software that promotes our vision of Intelligence Everywhere™, and are using our software development capabilities to develop bitcoin applications. We believe that the combination of our operating structure, bitcoin strategy and focus on technology innovation provides a unique opportunity for value creation.
MicroStrategy and Intelligence Everywhere are either trademarks or registered trademarks of MicroStrategy Incorporated in
View source version on businesswire.com: https://www.businesswire.com/news/home/20240711751900/en/
MicroStrategy Incorporated
Shirish Jajodia
Investor Relations
ir@microstrategy.com
Source: MicroStrategy Incorporated
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