Michael Saylor’s MicroStrategy (MSTR) is evaluating its bid for inclusion in the S&P 500 index. This move is influenced by the positive financial outcomes linked to the rising price of Bitcoin.
Financial Performance Overview
In the third quarter, MicroStrategy is expected to report a profit for the second consecutive time. The company’s anticipated earnings stem from Bitcoin’s recent surge, which increased from approximately $107,000 to $114,000.
Projected Earnings
- Estimated earnings for the third quarter: $2.9 billion.
- Expected earnings per share (EPS): $10.
- Total EPS over the past four quarters: approximately $22.80.
According to Jeff Walton, Chief Risk Officer of Strive, this profit reflects a significant increase and highlights the correlation between Bitcoin prices and MicroStrategy’s financial results.
Tax Liabilities and Net Income
MicroStrategy factors in an estimated deferred tax liability of $970 million, which results in a projected net income of $2.9 billion for this quarter.
Criteria for S&P 500 Inclusion
To qualify for S&P 500 inclusion, companies must meet several criteria. Key requirements include:
- Positive earnings per share in the latest quarter.
- More than 50% public float.
- Average daily trading volume exceeding 250,000 shares.
MicroStrategy currently fulfills these criteria, although the S&P 500 committee is not obligated to add companies merely because they meet these benchmarks. The upcoming rebalancing of the S&P 500 is set to take place after market hours on December 19, 2025.
Dividend Increase Announced
In addition to its growth, MicroStrategy has increased the dividend rate on its perpetual preferred stock (STRC) from 10% to 10.25%. This is part of a strategy to align with market valuations.
Dividend Details
- New dividend rate: 10.25%.
- Effective date for cash dividends: October 31.
- Current STRC price: approximately $97.
Analyst Ben Werkman noted that the adjustment reflects an effort to bring the stock closer to its $100 par value.
Market Reactions
As a result of these developments, MSTR shares rose by 2.9% in premarket trading. This uptick parallels a 3% increase in Bitcoin, which is currently priced at $116,700.
In conclusion, MicroStrategy’s alignment with Bitcoin market trends reinforces its potential for S&P 500 inclusion while also enhancing shareholder value through increased dividends.
