MicroStrategy (MSTR) is poised to report its second consecutive profitable quarter, driven by the strong performance of bitcoin (BTC). This achievement once again positions the business intelligence firm as a potential candidate for inclusion in the S&P 500 index.
According to an analysis by Strive Chief Risk Officer Jeff Walton, MicroStrategy is expected to report a net income of approximately $2.9 billion, or $10 per share, for the third quarter. This projection, which accounts for an estimated $970 million deferred tax liability, is based on bitcoin’s price appreciation from roughly $107,000 to $114,000 during the quarter. With this result, the company’s trailing twelve-month earnings per share (EPS) would reach approximately $22.80.
This financial performance is crucial as it helps MicroStrategy meet a key requirement for S&P 500 inclusion: positive trailing twelve-month earnings. The company already satisfies other criteria, including a profitable latest quarter, a public float exceeding 50%, and an average daily trading volume above 250,000 shares. However, the S&P 500 committee is not obligated to add any company that meets the technical qualifications. The index’s next rebalancing is scheduled to take effect after the market closes on December 19.
In separate news, MicroStrategy has increased the dividend rate on its perpetual preferred stock (STRC) from 10% to 10.25%, with cash dividends payable on October 31. Analyst Ben Werkman noted that the company will evaluate the rate monthly based on the stock’s five-day volume-weighted average price (VWAP). With STRC currently trading around $97, below its $100 par value, the 25 basis point increase is intended to help elevate the stock’s price.
Reflecting the positive sentiment, MSTR shares were up 2.9% in premarket trading, in tandem with a 3% increase in the price of bitcoin to $116,700.
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