MSCI has confirmed that it will officially remove MicroStrategy $MSTR from its indexes at the end of this month. A textbook example of a company that has long relied on issuing debt to buy $BTC , MicroStrategy has kept going with a premium-driven strategy that amounts to stepping on one foot with the other. Now passive index funds have directly pulled the plug on that playbook.
My view is that this will have a direct impact on MicroStrategy and on companies that go on to imitate its strategy. Once the index removal takes effect, passive funds tracking MSCI will be required to sell their holdings during the rebalancing period, putting the market under a concentrated wave of selling pressure. The model of treating crypto purchases funded by debt issuance as an ATM and relying on continual financing to drive up the premium is unlikely to work under the strict passive-investment framework of traditional finance.
Once the selling from this wave of passive rebalancing at the end of the month has been fully absorbed, do you think listed companies that rely on debt-funded crypto purchases to sustain a high premium will still be able to maintain their valuations?
#Strategy和Metaplanet遭MSCI指数剔除 #BTC
My view is that this will have a direct impact on MicroStrategy and on companies that go on to imitate its strategy. Once the index removal takes effect, passive funds tracking MSCI will be required to sell their holdings during the rebalancing period, putting the market under a concentrated wave of selling pressure. The model of treating crypto purchases funded by debt issuance as an ATM and relying on continual financing to drive up the premium is unlikely to work under the strict passive-investment framework of traditional finance.
Once the selling from this wave of passive rebalancing at the end of the month has been fully absorbed, do you think listed companies that rely on debt-funded crypto purchases to sustain a high premium will still be able to maintain their valuations?
#Strategy和Metaplanet遭MSCI指数剔除 #BTC
