Bitcoin holder MicroStrategy announces 10-for-1 stock split

Business intelligence firm and corporate bitcoin holder MicroStrategy announced a 10-for-1 stock split on Thursday.

Effective as of the close of business on Aug. 1 by means of a stock dividend to its holders, the class A and class B common stock splits aim to make MicroStrategy’s shares more accessible to investors and employees, according to a statement by the firm.

“As a result of the dividend, each holder of a share of MicroStrategy’s class A common stock will receive nine (9) additional shares of class A common stock and each holder of a share of MicroStrategy’s class B common stock will receive nine (9) additional shares of class B common stock,” the company said.

The shares are expected to be distributed after the close of trading on Aug. 7, with trading expected to recommence on a split-adjusted basis at market open on Aug. 8. 

“The stock dividend will not have any impact on the voting and other rights of stockholders,” MicroStrategy added.

A stock split increases the number of a company's shares by dividing existing shares into multiple new shares, thereby reducing the share price proportionately while keeping the company's market capitalization unchanged. This enhances liquidity, makes shares more affordable for retail investors and can improve market perception. The psychological effect of a lower share price can also attract more investors, although the underlying value of the company remains the same​.

MicroStrategy’s share price is up 6.4% in pre-market trading Thursday morning at $1,389, according to TradingView. The stock is down 17% over the past month but has gained 89% year-to-date. 

MSTR/USD price chart. Image: TradingView .

MicroStrategy buys additional 11,931 bitcoin for $786 million

MicroStrategy, which also considers itself a Bitcoin BTC +1.46% development company, purchased another 11,931 BTC for approximately $786 million at an average price of $65,883 per bitcoin last month.

The company now holds 226,331 BTC, worth roughly $13.4 billion. MicroStrategy’s total holdings were bought at an average price of $36,798 per bitcoin, a cost of around $8.33 billion, inclusive of fees and expenses, according to the company's founder and executive chairman Michael Saylor.

MicroStrategy announced plans to launch a Bitcoin-based decentralized identity protocol in May.