TLDR
- Strategy stock fell 2.6% to $119.06 after hours Wednesday as MSCI confirmed its removal.
- The deletion from the MSCI USA Index takes effect after the Nov. 30 close.
- Metaplanet and Upexi are also marked for deletion, and Sharplink is on a watchlist.
- JPMorgan estimated the exit could trigger about $2.8 billion in selling.
- Strategy says MSCI-linked funds hold about 13 million of its stock, or 3.1% of the total.
Strategy (MSTR) stock slipped 2.6% to $119.06 in after-hours trading on Wednesday. MSCI had just confirmed it will drop the Bitcoin treasury firm from its indexes.
One other report put the after-hours dip at 1.65%. The exact figure varied by source.
MSCI’s final November list shows “STRATEGY A” with the action “Deleted.” The change takes effect after the close on Nov. 30.
Strategy leaves the MSCI USA Index. Metaplanet exits the Japan Small Cap Index on the same date.
Crypto treasury firm Upexi is also marked for deletion. Ether treasury firm Sharplink was not cut and sits on a watchlist.
The removals were mostly expected. MSCI’s review documents gave no company-specific reasons.
Two Very Different Price Tags
JPMorgan estimated in October that Strategy’s exit could trigger roughly $2.8 billion in selling. Cointelegraph reported the figure at the time.
Strategy sees it differently. It says MSCI-linked funds hold about 13 million of its stock.
That equals 3.1% of its basic outstanding stock, the company said. It is also less than one day of trading volume.
Funds that track the affected benchmarks may sell the stocks. That would remove one source of passive demand.
How the Rules Changed
MSCI adopted new eligibility rules for non-operating companies last month. They look at a firm’s operating assets and five financial measures.
The rules replace temporary limits on companies that held at least half their assets in crypto. A company faces removal if it fails the screen in its two latest annual filing periods.
Strategy pushed back on the plan. Executive Chairman Michael Saylor and Phong Le called the treatment of digital asset treasuries “discriminatory.”
In a September letter, the company said exclusion would not hurt its business. It argued the move would harm MSCI’s standing as a neutral index provider.
Strategy also said the proposal repackaged MSCI’s earlier effort to exclude digital asset treasury firms. It said that effort added policy judgments to index construction.
Metaplanet closed Wednesday down 2.53% at 231 yen in Tokyo, before MSCI published its list. Strategy stock stood at $119.06 after hours, with the removals set for after the Nov. 30 close.
