MicroStrategy joins Nasdaq-100 ranks, but its stay could get cut short

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MicroStrategy has officially secured a spot in the Nasdaq-100 Index, ending uncertainty over whether the company would qualify.

Effective December 23, MicroStrategy’s inclusion in the Nasdaq-100 will add it to index-tracking funds like QQQ, an exchange-traded fund with over $250 billion in assets and exposure to millions of retail and institutional investors.

However, the company’s inclusion may be short-lived due to a looming classification review.

The Nasdaq-100 includes the 100 largest non-financial companies on the exchange.

For now, MicroStrategy, with its stock ticker MSTR, is classified as a technology firm based on its revenue from analytics software.

But its $42 billion Bitcoin holdings — central to Chair Michael Saylor’s strategy — could lead to reclassification as a financial company during the next industry benchmark review in March.

If that happens, MSTR could be promptly removed from the index, as financial firms are excluded.

“If the exchange considers Bitcoin a financial instrument, it would make it challenging for MSTR,” Joe Nardini, head of investment banking at B. Riley Securities told DL News. “If they buy the argument that Bitcoin is really software, then they have a chance.”

Bloomberg Intelligence analyst James Seyffart explained that the classification system hinges on revenue sources.

The industry classification benchmark is “based on a company’s revenue source; for MicroStrategy, that’s tech for now,” Seyffart noted.

He added that March’s review could still bring changes.

With a market cap of nearly $98 billion, MicroStrategy should debut around #40 in the Nasdaq-100 rankings, slightly ahead of peers like CrowdStrike and Intel.