It closed up 1%, but after the announcement, it briefly fell 2.3% in after-hours trading—MSCI has really taken action this time.
MSCI’s November index review results came out this morning: Strategy ($MSTR ) has officially been removed from the MSCI USA Index. Not placed on a watch list—removed outright. Four other companies were also dropped: Japan’s Metaplanet, the UK’s Yellow Cake, the US’s Upexi, and Iceland’s Skel. All five were named under the new rules announced on October 15 as “non-operating companies.”
A few key figures:
1. The change takes effect after the market closes on November 30, with the new index taking effect on December 1. Funds tracking the index must sell their holdings before then;
2. JPMorgan estimates passive outflows of about $2.8 billion. Index funds hold around 13 million shares, or 3.1% of the outstanding stock;
3. MSTR closed at $122.35 last night, up 1.06%. After the news broke, it briefly fell to $119.5 in after-hours trading.
My take is that the removal itself won’t force Strategy to sell a single coin. None of the 850,000 bitcoins ($BTC ) it holds will be sold as a result. What’s really being squeezed is its financing cycle: the route of getting passive inflows by joining an index, then issuing shares to buy bitcoin, has lost one of its supports. Looking ahead, there are two dates to watch: before November 30, index-tracking funds will gradually sell their 13 million shares, so trading volume during this window is worth monitoring. Meanwhile, SharpLink and the others on the watch list dodged a bullet this time, but they’ll have to face another review next year.
MSCI’s November index review results came out this morning: Strategy ($MSTR ) has officially been removed from the MSCI USA Index. Not placed on a watch list—removed outright. Four other companies were also dropped: Japan’s Metaplanet, the UK’s Yellow Cake, the US’s Upexi, and Iceland’s Skel. All five were named under the new rules announced on October 15 as “non-operating companies.”
A few key figures:
1. The change takes effect after the market closes on November 30, with the new index taking effect on December 1. Funds tracking the index must sell their holdings before then;
2. JPMorgan estimates passive outflows of about $2.8 billion. Index funds hold around 13 million shares, or 3.1% of the outstanding stock;
3. MSTR closed at $122.35 last night, up 1.06%. After the news broke, it briefly fell to $119.5 in after-hours trading.
My take is that the removal itself won’t force Strategy to sell a single coin. None of the 850,000 bitcoins ($BTC ) it holds will be sold as a result. What’s really being squeezed is its financing cycle: the route of getting passive inflows by joining an index, then issuing shares to buy bitcoin, has lost one of its supports. Looking ahead, there are two dates to watch: before November 30, index-tracking funds will gradually sell their 13 million shares, so trading volume during this window is worth monitoring. Meanwhile, SharpLink and the others on the watch list dodged a bullet this time, but they’ll have to face another review next year.
