Saylor's $MSTR Just Got Evicted From the Index Party 📉

Strategy, the enterprise software-turned-Bitcoin treasury company formerly known as MicroStrategy, faces possible removal from major global stock indexes after MSCI approved new rules targeting firms that resemble investment vehicles more than operating businesses. MSCI's earlier simulation identified Strategy, Japan's Bitcoin buyer Metaplanet and UK uranium holder Yellow Cake as potential exclusions, while Ethereum treasury firm SharpLink was flagged for a watchlist.

MSCI, the index provider behind benchmarks including MSCI World and MSCI Emerging Markets, based its framework on assessments of operating assets, business cash flow and reliance on external financing. Strategy has pushed back on the classification, telling MSCI "We believe the proposal is misguided" in its formal response.

The practical effect of any exclusion would be automated selling: ETFs and index-tracking funds would generally have to offload MSTR shares during the next rebalance. Strategy estimates MSCI-linked funds hold roughly 13 million shares, about 3.1% of its basic shares outstanding, and argues that volume equals less than a typical trading day. MSTR shares actually rose 5.62% on Thursday, closing at $151.29 before MSCI's announcement reached markets after the close.

A broader risk is weaker long-term demand for MSTR shares, which Strategy has relied on to fund additional purchases of $BTC. Exclusion would not delist MSTR from Nasdaq or force any Bitcoin sales by the company. MSCI will publish its list of affected companies on November 11, with the new rules taking effect after November 30 and existing constituents protected by a two-annual-filing test before any removal.