Strategy (MSTR.US) may be removed from the MSCI index! JP Morgan warns: this could trigger billions of dollars in capital outflows.

JPMorgan Chase issued a warning that Michael Saylor's Strategy (MSTR.US) could potentially be removed from the MSCI Inc. Class A stock index, a move that could trigger outflows of billions of dollars. MSCI is considering excluding companies that hold Bitcoin (BTC-USD) or other digital assets as treasury assets from its index, and has sought opinions from the investment community on this matter. The company stated, "MSCI proposes to exclude companies with digital asset holdings representing 50% or more of total assets from the MSCI Global Investable Market Index series." The consultation period will continue until December 31, with the final decision to be announced before January 15, 2026. Currently, Strategy is a component of the Nasdaq 100 Index, MSCI USA Index, and MSCI Global Index. JPMorgan analysts pointed out that about $9 billion of Strategy's total market value may exist in the form of passive holdings through exchange-traded funds (ETFs) and mutual funds linked to major benchmark indices. Analysts warned, "If MSCI insists on advancing the removal plan, it could lead to $2.8 billion in outflows for Strategy... If other index providers follow suit with MSCI and remove the company from all other stock indices, the outflow could reach $8.8 billion." They added, "Although active fund managers are not obligated to follow index adjustments, being removed from major indices will undoubtedly be seen as a negative signal by market participants, raising concerns about Strategy's future financing (equity and debt) costs and capabilities." Since reaching a historic high in November 2024, Strategy's stock price has plummeted by 67%, with a cumulative decline of 56% in the past six months. As of the time of writing, the stock had fallen by 4.87% before Friday's opening.