By Niket Nishant and Manya Saini
(Reuters) - Retail investors poured nearly $11 million into MicroStrategy's shares on Monday, almost three times their average daily inflows this year, after the biggest corporate holder of bitcoin secured a spot in the Nasdaq-100 index.
The data, compiled by Vanda (NASDAQ:VNDA) Research on Tuesday, highlights the bitcoin bull's growing popularity among individual investors after its stock notched an eye-popping return of nearly 550%, outpacing Wall Street favorite Nvidia (NASDAQ:NVDA)'s roughly 160% surge so far in 2024.
Promoted as a financial tool free of government intermediaries, bitcoin often earns its corporate champions a devoted following. Michael Saylor, the co-founder and executive chairman of MicroStrategy, is known for posting his bullish views on crypto to millions of his followers on X.
The company has also benefited from a massive rally in bitcoin, which crossed the $100,000 milestone for the first time earlier this month, thanks to the pro-crypto stance of U.S. President-elect Donald Trump.
"Most people wouldn't have a clue what MicroStrategy does as a day-to-day business, yet it has become the stock market's poster child for playing the bitcoin price," said Dan Coatsworth, investment analyst at AJ Bell.
While the company is primarily a bitcoin purchaser, it also sells business analytics software. Revenue from its software business fell 10% in the third quarter.
Short interest in the stock has retreated sharply — to 12.98% of the free float as of Dec. 16 compared with 20.7% at the start of 2024, according to data from analytics firm Ortex.
Short sellers, which profit from betting against an asset, often close out positions to limit losses when their trades turn unfavorable. The activity can boost prices further.
The average daily retail inflow in MicroStrategy was $3.75 million so far this year, according to data from Vanda, which excludes trading activity via private bankers or savings plans like 401(k).