Strategy faces potential removal from MSCI’s global equity indexes under new rules, with the index provider set to publish its final list of affected companies on November 11. Strategy warned last year that exclusion would trigger $2.8 billion in stock liquidation.
MSCI said non-operating companies will be ineligible for its Global Investable Market Indexes from the close of November 30, as part of its November index review. Strategy and Japan’s Metaplanet are on the list of potential deletions, while SharpLink and other crypto treasury companies are on a watchlist for possible removal.
MSCI began reviewing the issue a year ago, initially proposing to exclude digital asset treasury companies because they resemble investment funds. It later broadened the review to all non-operating companies, which it defines to include investment funds, business development companies and other companies whose finances make them look like one. Strategy said last year that exclusion would result in $2.8 billion of its stock being liquidated and would “chill” the industry.
MSCI said companies must meet financial tests on operating assets to remain eligible. Passive funds and other investors tracking benchmarks are required to hold shares of companies included in those benchmarks. Strategy had a market value of about $64.3 billion at Thursday’s close.
