Strategy (MSTR.US) Falls Over 4% as Possible MSCI Global Index Removal Looms

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Yesterday

On Friday, Strategy (MSTR.US), a major Bitcoin holder, dropped more than 4% in early trading and was last at $145.06.

On the news front, MSCI Inc. recently approved new rules that could ultimately remove Strategy Inc from its global equity benchmark indexes.

This move could trigger billions of dollars in stock selling and add fresh pressure to the financing model behind Michael Saylor's massive Bitcoin holdings.

According to analysts, a final removal would deal a heavy blow to the cryptocurrency reserve model pioneered by this former enterprise software company: companies raise capital from capital markets by issuing additional common shares, issuing debt, and issuing complex securities, then accumulate large amounts of crypto tokens.

The most critical impact is that removal from the index would shrink the stock's investor base, thereby weighing on its share price.

JPMorgan estimated last year that if MSCI removes it, it could trigger up to $2.8 billion in selling pressure on Strategy shares; if other index providers follow with similar adjustments, the scale of selling could further rise to $8.8 billion.

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