Nasdaq-listed software company MicroStrategy (MSTR), which holds the largest amount of bitcoin (BTC) among corporate entities, has announced a 10-for-1 stock split. This means that the company’s shares will be split on August 1, and shareholders will receive nine additional shares for each share they currently own after the market closes on August 7.
MicroStrategy stated that the purpose of the stock split is to make its shares more accessible to investors and employees. This decision comes on the heels of a significant increase in MicroStrategy’s share price over the past year, with the price more than tripling and reaching an all-time high of over $1,900 in March as the value of BTC soared past $70,000. Today, the shares rose by 6.8% to $1,300.
Led by Michael Saylor, an executive chairman and well-known supporter of bitcoin, MicroStrategy is often seen as a way to indirectly invest in the price of bitcoin. The company has been actively buying bitcoin for its treasury by issuing corporate debt, with its most recent purchase increasing its holdings to 226,331 BTC, valued at over $13 billion.
Stock splits are a common strategy used by companies whose share prices have experienced significant growth. While a stock split does not change the overall value of the company, it can make the stock more accessible to smaller retail investors by reducing the share price. This move is particularly significant at a time when many trading platforms offer fractional shares, allowing investors to buy portions of a share.
MicroStrategy’s decision to split its stock follows a similar move by chipmaker Nvidia (NVDA), which implemented a 10-for-1 stock split last month after its share price tripled in a year due to the rise of artificial intelligence-driven equities.
By making its shares more accessible through the stock split, MicroStrategy aims to attract more investors and provide an opportunity for employees to own a stake in the company. This move reflects the company’s confidence in its future growth and its commitment to making investing in MicroStrategy more inclusive and appealing to a wider range of stakeholders.