Tonight MSCI publishes its November index review, and Strategy is on the draft list marked for deletion. The rule targets companies whose assets are mainly held for investment rather than used in an operating business: fail the operating-asset test plus most of the extra financial ratios in two consecutive annual filings, and you are out of the Global Investable Market Indexes, effective at the close of November 30.
What it is not: removal doesn't delist the stock, and nothing in the rules forces Strategy to sell bitcoin. The selling would come from index funds that mirror the index, and JPMorgan's outflow estimate was built on MSCI's earlier proposal. As someone who models economic processes, I see a flow with a known date and a known direction, and markets usually trade that kind of flow before the date, not on it. The bigger question is the funding loop: buying $BTC by issuing stock works best when passive demand for that stock is automatic.
Does an index exclusion change how you look at bitcoin treasury companies? #Strategy #MSCI #BitcoinTreasury $BTC
What it is not: removal doesn't delist the stock, and nothing in the rules forces Strategy to sell bitcoin. The selling would come from index funds that mirror the index, and JPMorgan's outflow estimate was built on MSCI's earlier proposal. As someone who models economic processes, I see a flow with a known date and a known direction, and markets usually trade that kind of flow before the date, not on it. The bigger question is the funding loop: buying $BTC by issuing stock works best when passive demand for that stock is automatic.
Does an index exclusion change how you look at bitcoin treasury companies? #Strategy #MSCI #BitcoinTreasury $BTC