MSCI flags MSTR; its premium takes the first hit
MSCI’s new rules screen companies based on the share of their assets tied to operating businesses. Because Bitcoin makes up such a large portion of Strategy’s assets, the company has been placed on a watchlist for possible removal. The final list will be announced on November 11. MSTR shares fell 9.08% to $137.50. If passive funds are forced to cut their positions, the selling could reach billions of dollars.
The first casualty is MSTR’s mNAV premium. Pressure on the share price narrows the company’s ability to raise equity to buy more Bitcoin, slowing the pace of accumulation and lowering market expectations for spot buying. In the short term, the stock will likely pull back and consolidate. A break below the support of the previous high-volume trading range could open the door to a second leg down; if it holds, the stock may simply trade sideways and shake out weak hands. The real market impact will depend on how much passive funds reduce their positions around the November 11 announcement.
Before the list comes out, are you shorting MSTR to hedge the coins you hold, or using the pullback to add to your position?
$BTC $ETH $SOL
MSCI’s new rules screen companies based on the share of their assets tied to operating businesses. Because Bitcoin makes up such a large portion of Strategy’s assets, the company has been placed on a watchlist for possible removal. The final list will be announced on November 11. MSTR shares fell 9.08% to $137.50. If passive funds are forced to cut their positions, the selling could reach billions of dollars.
The first casualty is MSTR’s mNAV premium. Pressure on the share price narrows the company’s ability to raise equity to buy more Bitcoin, slowing the pace of accumulation and lowering market expectations for spot buying. In the short term, the stock will likely pull back and consolidate. A break below the support of the previous high-volume trading range could open the door to a second leg down; if it holds, the stock may simply trade sideways and shake out weak hands. The real market impact will depend on how much passive funds reduce their positions around the November 11 announcement.
Before the list comes out, are you shorting MSTR to hedge the coins you hold, or using the pullback to add to your position?
$BTC $ETH $SOL