Bitcoin reserve model faces a major test! MSCI's new rules "target" Strategy (MSTR.US): It may be removed from global indexes, with billions of dollars in selling pressure looming.

Title context: Bitcoin reserve model faces a major test! MSCI's new rules "target" Strategy (MSTR.US): It may be removed from global indexes, with billions of dollars in selling pressure looming. Text: Recently, MSCI Inc. approved new rules that could ultimately remove Strategy Inc. (MSTR.US) from its global equity benchmark indexes. The move could trigger billions of dollars in stock selling and add new pressure to the financing model behind Michael Saylor's massive Bitcoin holdings. The index provider said on Thursday that under a new framework effective at the close on Nov. 30, it will exclude companies classified as having non-operating businesses. Although the decision will not immediately remove Strategy from its benchmark indexes, it establishes a series of financial tests that, if failed, would cause the company to lose eligibility for inclusion in MSCI's global equity indexes. "MSCI will implement the proposal to define and classify non-operating companies as ineligible for inclusion in the MSCI Global Investable Market Indexes, as described in the consultation document published on August 3, 2026, with minor modifications," the index provider said in a statement, adding that existing constituents must fail multiple financial tests before being removed. Strategy's stock fell nearly 4% at one point in after-hours trading. The company did not immediately respond to a request for comment. According to analysts, a final removal would deal a heavy blow to the cryptocurrency reserve model pioneered by the former enterprise software company: companies raise funds from capital markets by issuing additional common shares, issuing debt, and issuing complex securities to stockpile large amounts of crypto tokens. The most critical impact is that removal from an index would shrink the stock's investor base, thereby weighing on its price. JPMorgan estimated last year that if MSCI removes it, it could trigger as much as $2.8 billion in Strategy stock selling pressure; if other index providers follow suit, the scale of selling could further increase to $8.8 billion. "For a company like Strategy, index inclusion is very important because it provides a programmatic passive bid whether it's 401(k) pension money flowing into the stock market every week or mutual fund money, it all falls into this category," said Brian Dobson, managing director of disruptive technology research at Clear Street. "If a company is removed from an index, the stock will experience some short-term selling pressure as people tracking that index close out positions." The total value of Bitcoin held by Strategy is close to $70 billion. Right now, demand for the company's various securities among investors who want exposure to this innovative financing model has already cooled. Saylor initially relied on issuing common stock at a premium to the value of its cryptocurrency asset holdings to drive the company's exponential expansion and turn it into the world's largest digital asset reserve company. But as market concerns about equity dilution grew, that premium gradually disappeared. Saylor then turned to issuing preferred stock, and now market demand for the preferred stock has also weakened. Recently, Strategy asked investors to approve a proposal to change preferred stock dividends to daily payments. "The company will find it harder to issue more shares and keep the whole Bitcoin acquisition money machine going," said Alexander Blume, CEO of Bitcoin-focused asset management firm Two Prime. "This also shows that these digital asset reserve companies are not viewed as operating businesses. I'm not surprised that some leading mainstream indexes don't want their clients exposed to such highly volatile assets." Saylor himself dismissed any potential move by MSCI. In an interview earlier this week, he said the index provider whose controlled capital he called "insignificant" was "imposing biased values on digital assets." He called its potential decision a "value judgment" that sets a bad precedent.