Strategy (MSTR) shares extended losses to 9.70% and were trading at $136.55, according to data from MSX.COM. The move came as MSCI is considering changes to its index inclusion rules, using the share of operating assets and multiple financial metrics to screen out companies whose asset structures are closer to investment funds. Because Strategy holds a large amount of Bitcoin, it has been identified as a potential removal candidate. The final list of affected companies is expected on Nov. 11. Market attention is centered on the possibility that, if Strategy is removed from relevant MSCI indexes, passive funds tracking those benchmarks could be forced to cut MSTR holdings. The potential selling pressure was described as reaching tens of billions of dollars, which could also affect the company’s strategy of continuing to accumulate Bitcoin through equity financing.
Strategy (MSTR) shares extended their decline to 9.70% and were trading at $136.55, according to MSX.COM data.
MSCI weighs changes to index inclusion rules
On the news front, MSCI is considering adjustments to its index inclusion criteria. The proposed framework would use the share of operating assets and a range of financial indicators to screen out companies whose asset structures are closer to investment funds.
Because Strategy holds a large amount of Bitcoin, the company has been listed as a potential candidate for removal. The final list of affected companies is expected to be released on Nov. 11.
Market watches risk of passive fund selling
Market concern is that, if Strategy is removed from related MSCI indexes, passive funds tracking those indexes may be forced to reduce their MSTR positions. The potential selling pressure could reach tens of billions of dollars, and that could affect the company’s strategy of continuing to increase its Bitcoin holdings through equity financing.
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