PiCK

Summary

  • MSCI said it has decided to remove Strategy from the MSCI USA Index and the MSCI World Index.
  • JPMorgan said the index removal could trigger as much as $2.8 billion in selling.
  • It also said selling could reach as much as $8.8 billion if other major equity indexes also remove Strategy.

Forecast Trend Report by Period

MSCI Inc. has decided to remove Strategy, the world's largest corporate holder of Bitcoin, from its key indexes.

Reuters reported on November 12 that MSCI will classify Strategy and several other companies as businesses with characteristics similar to investment funds. They will be removed from the MSCI USA Index and the MSCI World Index starting December 1. The rebalancing will take place on November 30.

MSCI had previously proposed excluding companies that hold more than 50% of their total assets in digital assets. It later broadened the review to cover non-operating companies more generally, including those focused more on holding assets than on substantive business operations.

The decision could curb institutional inflows into Strategy because passive funds that track MSCI indexes may have to sell the stock.

When index-tracking funds change their holdings, the resulting stock trades can total billions of dollars. JPMorgan previously warned that Strategy's removal from MSCI indexes could trigger as much as $2.8 billion in selling. It added that the figure could rise to as much as $8.8 billion if other major equity indexes also exclude the company.

The companies set to be removed also include Japan's Bitcoin treasury firm Metaplanet and Yellow Cake, a U.K. uranium investment company. SharpLink, an Ethereum treasury company, was placed on a watch list for possible future exclusion.

On the news, Strategy shares were down 1.76% in after-hours U.S. trading on November 11.

Uk Jin