MSTR Nears S&P 500 Inclusion, with Bitcoin Prices and FASB Rule Change Paving the Way
MicroStrategy (MSTR) could be on track for S&P 500 inclusion by June 20, but the company still needs to meet one key criterion: achieving positive GAAP net income over the trailing 12 months.
Currently, MSTR meets all the eligibility requirements for S&P 500 inclusion, except for one – positive net income over the most recent four quarters. To qualify, the company’s Q1 2025 earnings must be sufficient to offset losses from the previous three quarters. This is now a more attainable goal thanks to the Financial Accounting Standards Board’s (FASB) recent rule change concerning digital asset accounting.
Under the new FASB rule, companies must recognize their bitcoin holdings at fair value, allowing price gains or losses to impact the company’s bottom line. Prior to this change, companies were required to account for their digital assets at their lowest value, which led to significant impairment losses. For example, in Q4 2024, MSTR valued its bitcoin at less than $16,000 per token, resulting in a $1 billion impairment loss despite Bitcoin closing the year at approximately $94,000.
According to Richard Hass’ analysis on X, MSTR needs Bitcoin to close above $96,337 by March 31, 2025, to meet the trailing 12-month earnings requirement and become eligible for the S&P 500. With MSTR’s current holdings of 478,740 BTC, this price would allow the company to achieve positive net income over the trailing 12-month period, even with a Q4 2024 loss of $671 million.
Benchmark analyst Mark Palmer emphasized that if Bitcoin prices stay strong and MSTR continues to accumulate more tokens, S&P 500 inclusion is a real possibility. Palmer also noted that MSTR’s adoption of the new FASB rule only strengthens its case for inclusion. He pointed out, “Excluding MSTR from the S&P 500 would be surprising, given its outperformance compared to all current index constituents over the past four years.”
While joining the Nasdaq-100 was a significant milestone for MSTR, the S&P 500 is seen as the “holy grail,” according to Palmer. “Inclusion in the S&P 500 would validate MSTR’s Bitcoin strategy, as all S&P 500 index funds would hold MSTR shares, providing indirect exposure to Bitcoin for investors.”
