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MicroStrategy, renowned for its massive Bitcoin holdings, is initiating a 10-for-1 stock split effective August 1. This move comes after the company amassed $13 billion in Bitcoin, driving a significant share price increase.
Strategic Move by MicroStrategy
On Thursday, MicroStrategy, the biggest Bitcoin holding company, announced a stock split of 10 to 1.
Shares will be issued after the market closes on August 7, according to the company's press statement, which states that the split will take place on August 1. Every share of common stock that a class A or class B shareholder owns will be multiplied by nine by this new distribution.
As a result of the split, the firm claims its shares would be "more accessible to investors and employees."
In the past year, MicroStrategy's share price has more than tripled, reaching a record high of over $1,900 in March, with Bitcoin's rally beyond $70,000. This announcement follows the announcement. To $1,300, the stock price increased 6.8% today.
One may argue that MicroStrategy is really a leveraged bet on the Bitcoin price, run by Michael Saylor, who is both an executive chairman and a prominent Bitcoin supporter.
MicroStrategy's Bitcoin Bet
CoinDesk elaborates that in order to replenish its Bitcoin reserves, the firm routinely issues corporate debt. After last month's acquisition, the firm's Bitcoin holdings were 226,331 BTC, or more than $13 billion.
Public corporations that have seen a substantial increase in the value of their shares often engage in stock splits.
Stock Accessibility Post-Split
Although the stock's valuation will remain unchanged, the stock's share price could fall, making it more appealing to smaller retail investors. This is especially true given that many retail-facing trading platforms now provide fractional shares.
Among the most recent developments, chipmaker behemoth Nvidia (NVDA) witnessed a 10:1 stock split last month following a four-digit share price, tripling in a year propelled by the AI-driven equity rise.
