MSCI will delete Strategy from the MSCI USA Index at the close of trading on 30 November, according to the results of its November index review published on Wednesday. Metaplanet, the Tokyo-listed bitcoin treasury company, is listed for deletion in MSCI’s small-cap review for Japan. These are the first removals since MSCI adopted its non-operating company screens in October, which is when CryptoWatchDesk last covered the rule.
Strategy also comes out of MSCI’s US Prime Market 750 and US Investable Market 2500 indexes, the US list shows. MSCI’s documents give no reason for any single deletion, The Block noted. Under the October rules, a current constituent is removed if it fails the operating-asset test and four of five financial ratios in each of its two latest annual filing periods.
The rule is not only about crypto.
UK uranium holder Yellow Cake is also deleted, and Reuters reported that MSCI said such companies have the features of investment funds, which its benchmarks exclude.
Solana treasury firm Upexi is also marked for deletion, Cointelegraph and Korea’s Maeil Business reported. Ether treasury firm SharpLink stays in for now; Reuters and Cointelegraph both say it is on a watchlist.
The question for the market is the size of the forced selling.
JPMorgan analysts estimated that an MSCI exit could lead to about $2.8 billion of sales of Strategy stock, and up to $8.8 billion if other index providers followed, Reuters said. Strategy’s own figure is smaller: in its response to MSCI’s consultation, it said MSCI-linked funds owned roughly 13 million shares, equal to 3.1% of the basic share count and under one day of trading, Cointelegraph reported.
Both can be true, since the larger estimate depends on other index firms acting too.
Strategy shares fell about 2.5% in extended trading after the lists came out, Reuters reported. Metaplanet had closed 2.53% lower at 231 yen in Tokyo on Wednesday, before MSCI’s announcement, The Block said.
Strategy, which added 1,036 bitcoin in its latest weekly update, had called the treatment of treasury companies “discriminatory” in the consultation. Metaplanet last made news here with its ¥52 billion convertible bond plan.
MSCI says its results may still change for corporate events before the effective date. The deletions take effect as of the close on Monday, 30 November.
This article is for information only and is not investment advice.