MicroStrategy is poised to join the Nasdaq-100 index, contingent on the absence of any last-minute hurdles. This inclusion will necessitate significant buying activity from Nasdaq-100 ETFs, particularly heavyweights like QQQ, as they rebalance to reflect the updated index composition. Such demand could exert upward pressure on MicroStrategy’s stock price, potentially enabling Michael Saylor to further scale the company’s Bitcoin treasury via the issuance of convertible bonds.

Convertible bonds, a hybrid debt instrument, offer holders the option to convert their position into equity at maturity, rather than opting for repayment in cash. This structure has been instrumental in financing MicroStrategy’s Bitcoin acquisitions. However, a notable counterbalance exists, as certain funds employ a convertible arbitrage strategy—purchasing the bonds while hedging risk by shorting the underlying equity.

In essence, this is a structurally bullish catalyst for MicroStrategy. However, given the anticipation and positioning around this event, the potential for a “sell the news” reaction cannot be discounted.