Strategy Rebukes MSCI Proposal to Drop MSTR from Indexes

Strategy Inc. on Aug. 14 publicly rejected a consultation by MSCI that would remove its stock, MSTR, from MSCI’s global equity benchmarks. The company posted on X that “Digital assets are assets,” and argued index providers should measure markets rather than determine which assets companies may hold.

MSCI opened the consultation in May with a two-step eligibility screen for what it calls non-operating companies — firms whose value derives more from balance-sheet assets than from operating revenue. Issuers pass the first step if operating assets account for more than half of total assets. Firms that fail that test face a secondary exclusion screen composed of five financial ratios. A company that triggers four of the five flags would be deemed ineligible for MSCI’s Global Investable Market Indexes.

The five ratios cover operating asset intensity, expense intensity, operating cash flow, fair-value swings and capital dependence. MSCI applies gentler thresholds to current index constituents than to outside candidates. For existing constituents the operating-assets threshold sits near 10% of total assets and operating expenses near 5% of assets. MSCI said it intends to limit turnover so that a single missed year does not automatically cause deletion; current constituents would need two consecutive annual failures to be removed, while newcomers could be excluded after a single filing.

MSCI’s May simulation of the MSCI All Country World Investable Market Index identified three companies that would fail the proposed screens: Strategy, London-listed Yellow Cake PLC, and Tokyo-listed Metaplanet Holdings. Strategy was the only large-cap on that list, with a float-adjusted market value of about $23.9 billion. MSCI also placed three firms on a public watchlist: Taiwan’s Center Laboratories, Turkey’s Lydia Holding and ether treasury company SharpLink.

Strategy’s business model of raising equity and debt to accumulate bitcoin exposes it to the proposed mechanics, even though MSCI’s replacement proposal removed an earlier explicit crypto threshold. In its latest disclosure the company reported holding 840,447 BTC, having bought roughly 175,000 coins so far this year and selling about 7,000. Chief executive Phong Le has indicated the company may resume purchases later in the year.

An index exclusion would force passive funds that track MSCI benchmarks to sell holdings that no longer meet eligibility rules. JPMorgan analysts estimated about $2.8 billion in potential outflows if Strategy were removed from MSCI indexes; that estimate was based on an earlier withdrawn proposal. On Aug. 14 Strategy’s shares traded near the value of its bitcoin holdings, with market NAV close to 1x, leaving a narrow valuation margin if forced selling occurs. Investors can obtain bitcoin exposure through spot bitcoin ETFs without taking on company-specific balance-sheet or management risks.

MSCI previously shelved a December proposal that explicitly targeted companies with half or more of assets in crypto after objections from Strategy executives. MSCI then launched a broader review and replaced the explicit crypto threshold with the current five-ratio approach. The consultation remains open through Sept. 30, with MSCI expecting to publish results by mid-October and any adopted changes to take effect at the November 2026 Index Review. MSCI has said it may or may not implement the proposed screen, and watchlist firms would remain in indexes until they record a second consecutive failure under the proposed rules.