MicroStrategy Incorporated, a software firm listed on Nasdaq and recognized as the largest corporate holder of Bitcoin, announced a significant 10-for-1 stock split on July 11. This strategic move is designed to make the company’s shares more accessible to a broader range of investors and employees.
As detailed in the company’s press release, the board of directors has approved a 10-for-1 stock split for both class A and class B common stocks. This split will be implemented through a stock dividend, which will be distributed to shareholders of record as of the close of business on August 1, 2024. Specifically, each shareholder will receive nine additional shares for every share they own. The new shares are scheduled to be distributed after the close of trading on August 7, 2024, and trading will begin on a split-adjusted basis on August 8, 2024. Importantly, this stock split will not alter the voting or other rights of the stockholders.
This announcement follows a period of remarkable growth in MicroStrategy’s share price, which nearly tripled this year. The company’s shares hit an all-time high of $1,919 on March 27, shortly after Bitcoin reached a new peak of $73,737.
At the time of writing, MicroStrategy’s shares were trading at approximately $1,390, up 6.48% on the day.
Under the leadership of executive chairman Michael Saylor, a well-known advocate for Bitcoin, MicroStrategy has become closely associated with Bitcoin investment. The company frequently raises funds through corporate debt to purchase more Bitcoin, significantly increasing its holdings. As of the latest purchase, MicroStrategy holds 226,331 BTC, valued at over $13 billion.
Stock splits are common among companies whose share prices have appreciated substantially. Although a split does not change the company’s overall valuation, it reduces the share price, making the stock more psychologically accessible to retail investors. This is particularly relevant for MicroStrategy, as its share price has reached high levels that might be prohibitive for some investors. This approach is similar to that of other high-profile companies, such as NVIDIA Corp, which also executed a 10-for-1 stock split in June after seeing substantial price gains.
