Though the approval of spot Bitcoin (BTC) exchange-traded funds (ETFs) caused some fear about and turbulence for MicroStrategy (NASDAQ: MSTR), the company ultimately proved one of the best stock market performers of 2024.
Indeed, Michael Saylor’s firm is, despite a substantial fall from its yearly highs, 96.24% in the green since January 2, and MicroStrategy price today stands at $1344.55.
The situation is, however, set to change significantly once trading starts on August 8 as MSTR is set for a 10-for-1 stock split. This will be MicroStrategy’s first such action since 2002 when it consolidated with a 1-for-10 split.
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While historically, such decisions have played a practical role in making shares more acceptable – a practicable purpose largely rendered obsolete with the proliferation of fractional ownership – stock splits still have a major psychological impact and are generally well-received.
Conversely, as evidenced by Nvidia’s (NASDAQ: NVDA) own recent action, the decision is not guaranteed to lead to a strong and protracted uptrend. Therefore, Finbold decided to consult the most advanced model of OpenAI’s flagship artificial intelligence (AI) platform – ChatGPT-4o – on what the split may mean for MSTR stock.
ChatGPT analyzes what the split will mean for MSTR stock
ChatGPT started its analysis by pointing out that despite the split likely having a highly positive psychological impact, it does not truly change a company’s valuation or other fundamentals.
Indeed, the AI assessed that MicroStrategy’s core business of intelligence and analytics platforms is well-positioned for continued growth but described its vast Bitcoin holdings as a double-edged sword.
While MSTR tying itself to BTC offers significant potential upside when there is a cryptocurrency bull cycle, it also carries significant risk as there are no guarantees about what will happen next in the crypto markets.
Still, ChatGPT assessed that the stock split is likely to be a net positive for MicroStrategy shares, largely because it will impact public perception of the company.
When asked to provide a likely 12-month price target for post-split MSTR shares, the AI estimated they might climb to $165, especially should Bitcoin continue with a sustained uptrend.
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