Original Coverage & Source Attribution: www.disruptionbanking.com
Michael Saylor’s Strategy is widely expected to be removed from MSCI’s global equity indexes under new non-operating company rules. The final list is due today, with any changes taking effect at the close on November 30.
Strategy has already said it expects its Class A common stock to be excluded. It previously disclosed that funds tracking MSCI indexes held about 13 million shares, or roughly 3.1% of its basic shares outstanding. At the same time, the stock now trades at a discount to the value of its Bitcoin holdings, a sharp reversal from the premium it carried in earlier cycles. This leaves it more exposed to both index-driven selling and any further weakness in Bitcoin.
Recent earnings have underlined how much has changed since 2023. Record Bitcoin-related profits failed to lift the share price after software results disappointed and Bitcoin-per-share metrics turned negative. This is a marked contrast with 2023, when the software business was still seen as a real supporting pillar and the stock traded at a premium to its Bitcoin holdings.
MSCI Final List Due Today, Changes Effective November 30
MSCI is set to publish the final list of companies affected by its new non-operating company rules later today. Strategy is widely expected to be removed from the MSCI USA and MSCI World indexes. Any exclusion would take effect at the close on November 30, forcing tracking funds to sell the stock.
Strategy is already outside the S&P 500 because of GAAP losses tied to Bitcoin price moves. The MSCI decision does not automatically affect S&P eligibility, though both indexes are applying stricter tests to Bitcoin-heavy balance sheets. The Nasdaq-100 continues to include the stock.
Bitcoin Premium Has Collapsed
Bitcoin is trading near $73,600–$74,000. The index change would not force Strategy to sell any of its roughly 850,000 BTC. The impact on the cryptocurrency would instead come through Strategy’s role as the largest corporate buyer of Bitcoin, which it has largely funded by issuing equity. A weaker stock price and reduced passive demand would make that channel more expensive.
The valuation backdrop has changed significantly from earlier years. In 2022 and 2023, when Disruption Banking covered the company, MicroStrategy routinely traded at a premium to the value of its Bitcoin holdings. Investors paid extra for Michael Saylor’s accumulation pace and capital-raising capacity. That premium has largely disappeared. Recent measures show the stock trading at a discount to Bitcoin NAV (mNAV readings in the 0.8x–0.9x range). Correlation with Bitcoin remains high and beta is still elevated, but the buffer of a premium is now gone.
Earnings Have Already Shown the Market’s Sensitivity
Strategy’s most recent quarterly results (reported late October) produced a record $19.5 billion net income, driven almost entirely by a $20.9 billion unrealised gain on its Bitcoin holdings. Software revenue missed estimates and Bitcoin-per-share metrics turned negative year-to-date. The stock fell in the sessions after the results, even as headline profits looked strong. Bitcoin’s price has also been struggling of late, and not just because of the Binance hack. Markets focused on Bitcoin-per-share trends, capital structure and the software business rather than pure accounting gains.
This earnings sensitivity is relevant for the current MSCI decision. With the premium already compressed, further pressure on the stock from index selling could reinforce concerns about Strategy’s ability to keep issuing equity and buying Bitcoin. Some market commentators, including Crypto Banter, have highlighted the risk that weakness in Strategy’s share price and capital-raising capacity can feed through to broader Bitcoin sentiment, particularly if future earnings or Bitcoin price moves disappoint.
What Happens Next
MSCI finalized the new non-operating company rules on October 15. Preliminary lists had already marked Strategy, Metaplanet and a small number of other firms as potential deletions. The market has partially priced in the risk. Confirmation of exclusion today would still test the stock and sentiment around corporate Bitcoin treasuries, especially with the premium buffer now largely gone.
Author: Andy Samu
