Author: Shenchao TechFlow

On November 12, MSCI officially released MSCI November Index Review List, adding Strategy (MSTR) Class A shares to the list of stocks to be removed from the MSCI US Index. This adjustment, based on data as of the October 20 price cut-off, will take effect after the close of trading on November 30.

The day before, pre-market in the U.S., the market continued to focus on institutional estimates of up to $2.8 billion in potential passive selling pressure. With the final filing made public after U.S. Eastern Time trading on November 11, Strategy has lost its席位 on both the MSCI Global and ACWI indices, formally entering the countdown to liquidation after nearly a year of evaluation.

Five non-operational companies have been eliminated under the new non-commercial regulations.

The public list shows that this month, the MSCI US Index added only Moderna as a new stock, while simultaneously removing 24 other constituents, including Strategy. This action stems from the MSCI Non-Operating Entity新规 finalized on October 15.

Under the new procedure, issuers lacking substantive operating assets must pass five financial ratio screenings; failing four or more results in loss of index eligibility. Existing components that fail to pass for two consecutive reporting periods will be removed, and all five previously monitored reserve companies have been ultimately excluded.

Apart from Strategy, Japan’s Metaplanet has been removed from the Japanese small-cap index, UK uranium reserve provider Yellow Cake has been removed from the UK small-cap index, and Iceland’s Skel and US’s Upexi have also been removed from their respective indices, with Strategy accounting for over 90% of the merged market capitalization affected.

Post-market slight decline compared to dual passive selling pressure口径

The market reaction on the secondary market the evening of the announcement was relatively muted. According to market data, MSTR closed at $122.35 during regular trading hours on November 11, up 1.06%, and dipped 1.51% to $120.50 in after-hours trading following the official list release.

In terms of fund flow, J.P. Morgan previously estimated that the exclusion would result in approximately $2.8 billion in passive selling; Strategy itself disclosed that its passive funds tracking MSCI hold approximately 13 million shares, representing about 3.1% of the basic outstanding shares, which equates to roughly $1.59 billion based on the closing price of $122.35.

The stock enters a discount period without touching the spot Bitcoin position.

This liquidation coincides with a shift in the company's valuation rationale. According to Disruption Banking Premium Analysis, as of November 8, Strategy held 850,364 bitcoins, with a total cost of $64.16 billion and an average holding price of $75,456.

After a correction, MSTR's stock price has now traded at a discount to its net Bitcoin asset value. The financing flywheel, which previously relied on issuing shares at a high premium to raise funds for Bitcoin purchases, is under significant pressure, and concentrated passive selling will further restrict future equity financing opportunities.

In response to the outcome, Strategy's Executive Chairman Michael Saylor and CEO Phong Le had previously criticized the rules as discriminatory, while Metaplanet CEO Simon Gerovich stated that the adjustments will not alter his bitcoin accumulation plan.

Mechanically, the index removal only requires passive stock funds to reduce their holdings in MSTR shares and does not compel the company to sell its spot Bitcoin. From now until the close of trading on November 30, index funds must complete their rebalancing and liquidation; MSTR must absorb this selling pressure during the discount period.