- MSCI will remove Michael Saylor’s Strategy from its global indexes at the close of November 30.
- Funds tracking MSCI indexes hold approximately 13 million Strategy shares, representing about 3.1% of the company.
- Strategy warned that index-related selling could reduce trading liquidity and make future capital raising more difficult.
MSCI Removes Strategy From Global Indexes
MSCI will remove Michael Saylor’s Strategy from its global indexes at the close of November 30, according to the index provider. The decision could affect a significant block of Strategy stock because funds tracking MSCI indexes hold approximately 13 million shares, or about 3.1% of the company, according to Strategy.
Strategy disclosed in its Nov. 2 quarterly filing that it expected to be removed from the indexes. The company warned that selling by investment funds designed to track MSCI benchmarks could reduce trading liquidity for Strategy shares and make it more difficult for the company to raise capital.
Why MSCI Is Dropping Strategy
MSCI evaluates companies for substantial operating assets and applies five financial tests to businesses that do not meet that standard. Existing index members can be removed if they fail the financial screen during both of their two most recent annual filing periods.
The final list includes five other deletions under the same rules, including Metaplanet and Upexi. The removals reflect MSCI’s application of its financial screening framework to companies whose business structures and asset profiles do not satisfy the relevant index requirements.
Strategy Defends Its Bitcoin Business Classification
Strategy opposed the proposal, arguing that it reports its Bitcoin business as an operating segment under U.S. accounting standards. The company’s Bitcoin holdings reached 850,364 $BTC after Strategy spent $81.9 million to purchase 1,036 $BTC during the week through Nov. 8.
The index removal comes as Strategy continues to maintain a large Bitcoin position and use its corporate financing strategy to support its digital-asset holdings. The potential impact will depend in part on how index-tracking investors respond before and after the removal takes effect.
Why This Matters
MSCI index decisions can influence the trading activity and shareholder base of companies held by benchmark-tracking funds. For Strategy, the removal creates the prospect of selling pressure involving approximately 13 million shares while also raising concerns about liquidity and access to capital, both of which the company identified in its quarterly filing.
The decision also highlights the importance of MSCI’s operating-asset and financial-screening rules for companies with substantial Bitcoin holdings. Strategy’s objection centers on its treatment of its Bitcoin operations under U.S. accounting standards, but MSCI’s final decision will take effect at the close of November 30.
Frequently Asked Questions
When will MSCI remove Strategy from its indexes?
The removal is scheduled to take effect at the close of November 30.
How many Strategy shares are held by MSCI-tracking funds?
Funds tracking MSCI indexes hold approximately 13 million Strategy shares, representing about 3.1% of the company.
Why did Strategy oppose the removal?
Strategy said it reports its Bitcoin business as an operating segment under U.S. accounting standards. The company also warned that index-related selling could reduce trading liquidity and make it harder to raise capital.
