MicroStrategy 10-for-1 Stock Split Approved

Key Takeaways: 

• MicroStrategy approves a 10-for-1 stock split to increase accessibility.
• Investors get nine extra shares, and the price adjusts proportionally.
• Stockholder rights remain unchanged despite increased shares.

Deep Insight into MicroStrategy’s Stock Split 

On July 11, MicroStrategy, which is the largest corporate holder of Bitcoin (BTC), announced that its board of directors approved a 10-for-1 stock split into A common stock and class B common stock.

$MSTR announces 10-for-1 Stock Split https://t.co/u7sIjWc9we

— Michael Saylor⚡️ (@saylor) July 11, 2024

A 10-for-1 stock split means investors receive nine additional shares for every one share they own, increasing outstanding shares and making the stock more affordable. For example, a $1,500 stock like MicroStrategy's would become $150 per share after the split.

According to the firm's official statement, MicroStrategy's stock split decision aims to create a more accessible market pathway for investors and employees to own shares. 

The firm further disclosed that its Class A and Class B shares will be distributed after the close of trading on August 7, 2024. 

Trading will begin on a split-adjusted basis on August 8, 2024. As a result, investors' shareholdings will automatically increase tenfold, and the price per share will be adjusted proportionally to reflect the split.

Meanwhile, MicroStrategy’s stock split will not affect the voting and other rights of stockholders, ensuring that their influence within the company remains unchanged despite the increased number of shares. 

MicroStrategy aims to make its shares more accessible to investors like #Bitcoin itself. This move, while not altering the company's market capitalization, can enhance liquidity and attract a broader investor base, particularly retail investors. https://t.co/DUELjpqvKp

— Yavuz Akbay (@econakbay) July 11, 2024

MicroStrategy’s Stock Split Comes Amidst Share Price Increase

MicroStrategy's stock split announcement follows a remarkable year of growth marked by a high increase in its share price. Over the past year, the company's stock has recorded more than triple its value, reaching an all-time high of over $1,900 in March, largely driven by Bitcoin's surge past $70,000. 

This rally highlighted the company's strong correlation with Bitcoin's performance, given its substantial holdings of 226,331 BTC worth roughly $13.4 billion.

MicroStrategy $13.4 billion worth of BTC

On July 11, the day of the stock split announcement, MicroStrategy's shares saw a rise of 6.8%, closing at $1,300. The positive momentum continued 24 hours later, with the current share price up by an additional 3%, now trading at $1,342. 

MSTR is up 3% today

This sustained increase reflects investor confidence in the company's strategic decisions and its ongoing commitment to making its shares more accessible through the stock split.

Notably, stock splits are a common strategy employed by public companies when their shares have appreciated in value. 

🚨🇺🇸NVIDIA'S STOCK SPLITS TODAY

Nvidia's 10-for-1 stock split is now in effect, giving investors 9 additional shares for every one they own.

$3.011 Trillion: Nvidia’s total market value as of Wednesday.

$147 billion: That’s the one-day increase in Nvidia’s market value on… pic.twitter.com/TyxUPRWSQa

— Mario Nawfal (@MarioNawfal) June 10, 2024

Nvidia (NVDA), a chipmaker giant, executed a 10-for-1 stock split last month. The company's share price had tripled over the past year, reaching a four-digit figure, driven by the AI equities rally, which boosted investor interest and confidence.