TLDR
MSCI may remove Strategy (MSTR) from its indices by Jan 15, potentially forcing $8.8 billion in fund outflows
CEO Phong Le said the company would sell bitcoin if market cap drops below its crypto holdings value
Strategy’s mNAV ratio stands at 1.01, barely above the threshold that would trigger sales
The stock has plunged 37% this year as bitcoin dropped from $120,000 to current levels around $93,000
Strategy owns 650,000 BTC worth $59 billion and recently cut its year-end bitcoin price forecast to $85,000-$110,000
Strategy is negotiating with MSCI over potential removal from major equity indices. The index provider plans to decide by January 15.
MicroStrategy Incorporated, MSTR
The consequences could be severe. If MSCI removes Strategy and other index providers follow, passive funds could dump up to $8.8 billion worth of shares.
That’s JPMorgan’s estimate. Strategy appears in indices like MSCI USA and MSCI World, making it a holding in countless passive investment products.
Executive Chairman Michael Saylor confirmed discussions are underway. He questioned JPMorgan’s $8.8 billion figure but didn’t dispute the general threat.
The company’s stock has dropped 37% this year. Some reports put the decline at 60% from July’s peak.
First Sale in Five Years Could Happen Soon
CEO Phong Le shocked investors last week. He said Strategy would sell bitcoin under specific conditions.
The company hasn’t sold a single coin since August 2020. That’s when it started building its bitcoin treasury.
Le identified two scenarios that could trigger sales. The most pressing involves the company’s market capitalization.
If Strategy’s market cap falls below the value of its bitcoin holdings, sales could begin. “My hope is our mNAV doesn’t go below one, but if we did and we didn’t have access to other capital, we would sell bitcoin,” Le explained.
That metric currently sits at 1.01 according to Artemis. The company is dangerously close to the sell threshold.
Saylor defended the potential policy shift Monday. “We will make rational decisions that are in the best interest of the equity shareholders,” he told investors.
He rejected the idea that selling means abandoning bitcoin. The move would be mathematical, not philosophical.
Bitcoin Volatility Pressures Strategy
Bitcoin’s recent price action has intensified scrutiny. The cryptocurrency hit an all-time high above $120,000 before crashing to $82,000.
It has since recovered to around $93,000. That’s still 26% below the peak.
Critics say Strategy’s strategy of issuing debt and equity to buy bitcoin isn’t sustainable. The company’s falling stock price seems to validate those concerns.
Strategy bought 130 more bitcoin on Monday. The purchase brought total holdings to 650,000 BTC worth roughly $59 billion.
The company also allocated $1.44 billion for preferred stock dividends and debt interest payments. Management is clearly watching its financial obligations.
Strategy revised its 2025 guidance downward. It now expects bitcoin to finish the year between $85,000 and $110,000.
Previous guidance assumed $150,000. The new range reflects current market conditions.
The MSCI decision deadline arrives January 15. Strategy’s mNAV ratio remains at 1.01, just above the level that would force bitcoin sales for the first time in company history.
